labor cd 06 ed

ADAMSON COLLEGE OF LAWADAMSON COLLEGE OF LAWCASE DIGESTS IN LABOR LAWCASE DIGESTS IN LABOR LAW2006 BAR OPERATIONS2006 BAR OPERATIONS

Employer-Employee Relationship- Control Test:G.R. No. 138051. June 10, 2004.JOSE SONZA vs. ABS-CBN BROADCASTING CORPORATION,

Facts: In May 1994, respondent ABS-CBN Broadcasting Corporation (ABS-CBN) signed an Agreement with the Mel and Jay Management and Development Corporation (MJMDC). ABS-CBN was represented by its corporate officers while MJMDC was represented by Sonza, as President and General Manager, and Tiangco, as EVP and Treasurer. Referred to in the Agreement as “AGENT”, MJMDC agreed to provide Sonza’s services exclusively to ABS-CBN as talent for radio and television.

In April 1996, Sonza irrevocably resigned in view of recent events concerning his programs and career. He thereafter filed a complain against ABS-CBN before the Department of Labor and Employment. Sonza complained that ABS-CBN did not pay his salaries, separation pay, service incentive leave pay, 13th

month pay, signing bonus, travel allowance and amounts due under the Employees Stock Option Plan.

ABS-CBN filed a Motion to Dismiss on the ground that no employer-employee relationship existed between the parties. The Labor Arbiter denied it and directed the parties to file their respective position papers. He then considered the case submitted for resolution and rendered decision dismissing the complaint for lack of jurisdiction.

Sonza appealed to the NLRC which affirmed the Labor Arbiter’s decision. Sonza filed a motion for reconsideration, which the NLRC denied.

He then filed a special civil action for certiorari before the Court of Appeals assailing the decision and resolution of the NLRC. The Court of Appeals rendered a decision dismissing the case. Hence, the petition

Issue: Whether or not employer-employee relationship existed between Sonza and ABS-CBN.

Ruling: Existence of an employer-employee relationship is a question of fact. Appellate courts accord the factual findings of the Labor Arbiter and the NLRC not only respect but also finality when supported by substantial evidence. Court does not substitute its own judgment for

that of the tribunal in determining where the weight of evidence lies or what evidence is credible.

Case law has consistently held that the elements of an employer-employee relationship are: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer’s power to control the employee on the means and methods by which the work is accomplished. The last element, the so-called “control test,” is the most important element.

The specific selection and hiring of Sonza, because of his unique skills, talent and celebrity status not possessed by ordinary employees, is a circumstance indicative but not conclusive of independent contractual relationship. The method of selecting and engaging Sonza does not conclusively determine his status.

All the talent fees and benefits paid to Sonza were the result of negotiations that led to the Agreement. If Sonza were ABS-CBN’s employee, there would be no need for the parties to stipulate on benefits such as “SSS, Medicare, x x x and 13th month pay” which the law automatically incorporates into every employer-employee contract. Whatever benefits Sonza enjoyed arose from contract and not because of an employer-employee relationship.

The power to bargain talent fees way above the salary scales of ordinary employees is a circumstance indicative, but not conclusive, of an independent contractual relationship.

Applying the control test to the present case, the court found that Sonza is not an employee but an independent contractor. The control test is the most important test our courts apply in distinguishing an employee from an independent contractor. This test is based on the extent of control the hirer exercises over a worker. The greater the supervision and control the hirer exercises, the more likely the worker is deemed an employee. The converse holds true as well – the less control the hirer exercises, the more likely the worker is considered an independent contractor.

ABS-CBN did not exercise control over the means and methods of performance of Sonza’s work. A radio broadcast specialist who works under minimal supervision is an independent contractor. Being an exclusive talent does

2006 BAR OPERATIONSFaculty Chair: Atty Hilario MagsinoOver-all Chair: Nerissa GuiraoAcademic Committee Head: Celso J. Hernandez Jr. Subject Head: Madonna Dimaano Academic Committee Members: Lisa Tubilleja, Nerissa Guirao (Civil) Christopher Bonoan (Poli) Anthony Malicdem (Tax) Celso J. Hernandez Jr. (Crim, Commercial) Rey Rabago, Donnalee Silanga(Remedial)

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not by itself mean that Sonza is an employee of ABS-CBN. Even an independent contractor can validly provide his services exclusively to the hiring party. In the broadcast industry, exclusivity is not necessarily the same as control.

A mere executive issuance cannot exclude independent contractors from the class of service providers to the broadcast industry. The classification of workers in the broadcast industry into only two groups under Policy Instruction No. 40 is not binding on the courts, especially when the classification has no basis either in law or in fact.

The right of labor to security of tenure as guaranteed in the Constitution arises only if there is an employer-employee relationship under labor laws. Not every performance of services for a fee creates an employer-employee relationship.

The Labor Arbiter can decide a case based solely on the position papers and the supporting documents without a formal trial. The holding of a formal hearing or trial is something that the parties cannot demand as a matter of right. Subject to the requirements of due process, the technicalities of law and the rules obtaining in the courts do not strictly apply in proceedings before a Labor Arbiter.

Petition is DENIED.

EMPERMACO B. ABANTE, JR. vs. LAMADRID BEARING & PARTS CORP. and JOSE LAMADRID, PresidentG.R. No. 159890. May 28, 2004

Facts: Petitioner was employed by respondent company Lamadrid Bearing and Parts Corporation sometime in June 1985 as a salesman earning a commission of 3% of the total paid-up sales covering the whole area of Mindanao. His average monthly income was more or less P16,000.00, but later was increased to approximately P20,269.50. Aside from selling the merchandise of respondent corporation, he was also tasked to collect payments from his various customers.

Sometime in 1998, petitioner encountered five customers/clients with bad accounts. Petitioner was confronted by respondent Lamadrid over the bad accounts and warned that if he does not issue his own checks to cover the said bad accounts, his commissions will not be released and he will lose his job. He issued

his personal checks in favor of respondent corporation on condition that the same shall not be deposited for clearing and that they shall be offset against his periodic commissions.

Contrary to their agreement, respondent deposited the remaining checks which were dishonored by the drawee bank due to “Account Closed.”

On March 22, 2001, counsel for respondent corporation sent a letter to petitioner demanding that he make good the dishonored checks or pay their cash equivalent.

While doing his usual rounds as commission salesman, petitioner was handed by his customers a letter from the respondent company warning them not to deal with petitioner since it no longer recognized him as a commission salesman.

Petitioner thus filed a complaint for illegal dismissal with money claims against respondent company and its president, Jose Lamadrid, before the NLRC Regional Arbitration Branch No. XI, Davao City.

By way of defense, respondents countered that petitioner was not its employee but a freelance salesman on commission basis, procuring and purchasing auto parts and supplies from the latter on credit, consignment and installment basis and selling the same to his customers for profit and commission of 3% out of his total paid-up sales.

Finding no necessity for further hearing the case after the parties submitted their respective position papers, the Labor Arbiter rendered a decision declaring respondents Lamadrid Bearing & Parts Corp. and Jose Lamadrid to pay jointly and severally complainant EMPERMACO B. ABANTE, JR. P1,336,729.62 representing his awarded separation pay, back wages (partial) unpaid commissions, refund of deductions, damages and attorney’s fees.

National Labor Relations Commission reversed the decision of the Labor Arbiter and dismissed the instant case for lack of cause of action.

Court of Appeals denied the petition of petitioner Abante.

Issue: Whether or not the petitioner is an employee of respondent corporation.

Ruling: To ascertain the existence of an employer-employee relationship, jurisprudence has invariably applied the


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four-fold test, namely: (1) the manner of selection and engagement; (2) the payment of wages; (3) the presence or absence of the power of dismissal; and (4) the presence or absence of the power of control. Of these four, the last one is the most important.

The so-called “control test” is commonly regarded as the most crucial and determinative indicator of the presence or absence of an employer-employee relationship. Under the control test, an employer-employee relationship exists where the person for whom the services are performed reserves the right to control not only the end achieved, but also the manner and means to be used in reaching that end.

Applying the aforementioned test, an employer-employee relationship is notably absent in this case. It is undisputed that petitioner Abante was a commission salesman who received 3% commission of his gross sales. Yet no quota was imposed on him by the respondent; such that a dismal performance or even a dead result will not result in any sanction or provide a ground for dismissal. He was not required to report to the office at any time or submit any periodic written report on his sales performance and activities. Although he had the whole of Mindanao as his base of operation, he was not designated by respondent to conduct his sales activities at any particular or specific place. He pursued his selling activities without interference or supervision from respondent company and relied on his own resources to perform his functions. Respondent company did not prescribe the manner of selling the merchandise; he was left alone to adopt any style or strategy to entice his customers.

While it is true that he occasionally reported to the Manila office to attend conferences on marketing strategies, it was intended not to control the manner and means to be used in reaching the desired end, but to serve as a guide and to upgrade his skills for a more efficient marketing performance. As correctly observed by the appellate court, reports on sales, collection, competitors, market strategies, price listings and new offers relayed by petitioner during his conferences to Manila do not indicate that he was under the control of respondent.

Moreover, petitioner was free to offer his services to other companies engaged in similar or related marketing

activities as evidenced by the certifications issued by various customers.

The decision of Court of Appeals was affirmed.

Regular Employee:MITSUBISHI MOTORS vs. CHRYSLER PHILIPPINESG.R. No. 148738

Facts: Nelson Paras was hired by MMPC (Mitsubishi Motors Philippines Corporation) on probationary basis. He started reporting to work on May 27, 1996. He was later evaluated by his immediate supervisors and received an average rating. He was informed that based on his performance, he would be regularized.

However, the Division and Department managers together with his immediate supervisors reviewed the performance and unanimously agreed that the performance was unsatisfactory. As a consequence, Paras was not regularized. On November 26, 1996, he received a notice of termination dated November 25, 1996 informing him that his services were terminated effective said date since he failed to meet the required company standards for regularization.i

The labor union demanded the settlement of the dispute. It posited that Paras was dismissed on his one hundred eighty third (183rd) day of employment, or three days after the expiration of the probationary period of 6 months. It was contended that Paras was already a regular employee on the date of the termination of his probationary employment.

Issue: Whether or not Paras was a regular employee when served the notice of termination


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Ruling: Applying Article 13 of the Civil Code, the probationary period of six (6) months consists of one hundred eighty (180) days. This is in conformity with paragraph one, Article 13 of the Civil Code which provides that the months which are not designated by their names shall be understood as consisting of thirty (30) days each. The number of months in the probationary period, six months should then be multiplied by the number of days within a month, thirty days; hence, the period of one hundred eighty days. As clearly provided for in the last paragraph of article 13, in computing the period, the first day shall be excluded and the last day included. Thus, the 180 days commenced o may 27, 1996 and ended on November 23, 2996. The termination letter dated November 25, 1996 was served on November 26, 1996. He was, by then, a regular employee of the petitioner.

MANILA WATER CO. V. PENA434 SCRA 53

Facts: Manila Water Co. undertook to absorb former employees of the MWSS whose names and positions were in the list furnished by MWSS, while the employment of those not in the list was terminated on the day MWC took over the operations of the East zone.

Respondents, being contractual collectors of the MWSS, were among the 121 employees not included in the list, nevertheless, petitioners engaged their services without written contract.

The 121 collectors incorporated the AGCI, which was contracted by petitioner to collect charges for the Balara branch.

Later on, petitioner terminated its contract with AGCI.

Respondents filed a complaint for illegal dismissal, contending that they were petitioner’s employees as all the methods and procedures of their collection were controlled by the latter.

The labor arbiter rendered a decision finding the dismissal of respondents illegal.

Issue: Whether or not there exists an employer-employee relationship between petitioner and respondents.

Held: AGCI was not an independent contractor. AGCI does not have substantial capitalization or investment in the form of tools, equipment, machineries, work premises, and other materials to qualify as an independent contractor.

The work of the respondents was directly related to the principal business or operation of the petitioner.

AGCI did not carry on an independent business or undertake the performance of its service contract according to its own manner and method, free from the control and supervision of its principal, the petitioner.

Therefore, there exists an employer-employee relationship.

Employment Contract, Period :Pangilinan vs. General Milling Corporation GR No. 149329-July 12, 2004

Facts: Petitioners were employed by respondent as casual employee to work on one of its poultry plant in Rizal. They have signed under separate “temporary / casual contracts of employment, for a period of 5 months.

Upon the expiration of their contracts, petitioners were terminated; hence they filed an illegal dismissal case against GMC alleging that they were already regular employee at the time of their separation. Moreover, their work is usual & necessary to the mainline of business; as such they can be considered regular and cannot be terminated without just cause or notice thereof. Employer ruled in favor of GMC. Thus this petition

Issue: Whether or not petitioners can be considered a regular employee at the time of there separation.

Held: The petition is bereft of merit. Article 280 of the Labor Code, does not proscribe or prohibit an employment contract with fixed period. They are binding & valid, provided it was entered voluntarily & knowingly without coercion. A contract of employment for a definite period terminates by its own term at the end of such period.

Independent Contractor:MANILA WATER CO. V. PENA434 SCRA 53


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Facts: Manila Water Co. undertook to absorb former employees of the MWSS whose names and positions were in the list furnished by MWSS, while the employment of those not in the list was terminated on the day MWC took over the operations of the East zone.

Respondents, being contractual collectors of the MWSS, were among the 121 employees not included in the list, nevertheless, petitioners engaged their services without written contract.

The 121 collectors incorporated the AGCI, which was contracted by petitioner to collect charges for the Balara branch.

Later on, petitioner terminated its contract with AGCI.

Respondents filed a complaint for illegal dismissal, contending that they were petitioner’s employees as all the methods and procedures of their collection were controlled by the latter.

The labor arbiter rendered a decision finding the dismissal of respondents illegal.

Issue: Whether or not there exists an employer-employee relationship between petitioner and respondents.

Held: AGCI was not an independent contractor. AGCI does not have substantial capitalization or investment in the form of tools, equipment, machineries, work premises, and other materials to qualify as an independent contractor.

The work of the respondents was directly related to the principal business or operation of the petitioner.

AGCI did not carry on an independent business or undertake the performance of its service contract according to its own manner and method, free from the control and supervision of its principal, the petitioner.

Therefore, there exists an employer-employee relationship.

Dismissal:BOLINAO SECURITY AND INVESTIGATION SERVICE, INC. vs. ARSENIO M. TOSTONG.R. No. 139135. January 29, 2004

Facts: Respondent Arsenio M. Toston, was employed as a security guard by Bolinao Security and Investigation Service, Inc., with a monthly salary of P5,000.00.On August 17, 1995 due to a gunshot wound he sustained from his co-security guard.

He filed an application for one-month leave of absence. He also claimed and/ or medical benefits. While petitioner approved his one-month LOA his claim for the benefits were rejected. He found out however that the petitioner failed to remit it monthly contributions for nine (9) consecutive months. He then reported this to SSS.

On September 15, 1995, Lucy Caasi, in-charge of remitting petitioner’s contributions to the SSS, scolded and rebuked respondent and told him not to report for work and that his name would be “dropped from the rolls.”

On September 29, 1995, respondent filed with the Labor Arbiter a complaint against petitioner and its president, for illegal dismissal and non-payment of wages and other benefits, with prayer for reinstatement and payment of full back wages. The Labor Arbiter rendered decision in favor of the respondent.

Upon appeal, NLRC promulgated a decision affirming with modification the Arbiter’s assailed Decision in the sense that the award of moral and exemplary damages was deleted. The Court of Appeals also affirmed the decision of the NLRC.

Hence this appeal.

Issue: Whether or not respondent Toston was illegally dismissed?

Held: In the case at bar, there is no showing of a clear, valid and legal cause which justifies respondent’s removal from employment. Neither did petitioner serve two written notices to respondent prior to his termination from employment as required by the Labor Code. Clearly, this is a case of illegal dismissal.

It is a settled doctrine that “the employer has the burden of proving the lawfulness of his employee’s dismissal. The validity of the charge must be clearly established in a manner consistent with due process. The Implementing Rules of the Labor Code provide that no worker shall be dismissed except for a just or authorized cause provided by law and after due process. This provision has two aspects: (1) the legality of the act of dismissal, that is, dismissal based on the grounds provided by Article 282 of the Labor Code, and (2) the legality in the manner of dismissal. The illegality of the act of dismissal constitutes discharge without just cause, while illegality in the manner of dismissal is dismissal without


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due process.” Clearly, petitioner failed to discharge its burden.

Respondent who was illegally dismissed from work is actually entitled to reinstatement without loss of seniority rights and other privileges as well as to his full backwages, inclusive of allowances, and to other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.

However, the circumstances obtaining in this case do not warrant the reinstatement of respondent. Apparently, antagonism caused a severe strain in the relationship between him and petitioner company. A more equitable disposition would be an award of separation pay equivalent to at least one month pay, or one month pay for every year of service, whichever is higher (with a fraction of at least six (6) months being considered as one (1) whole year), in addition to his full backwages, allowances and other benefits

Records show that respondent was employed from March 1993 to September 15, 1995, or for two (2) years and six (6) months, with a monthly salary of P5,000.00. Hence, he is entitled to a separation pay of P15,000.00.

The assailed decision and resolution of the Court of Appeals are hereby AFFIRMED WITH MODIFICATION in the sense that, in lieu of reinstatement, respondent is awarded separation pay equivalent to P15, 000.00; and his full backwages, other privileges and benefits, or their monetary equivalent during the period of his dismissal up to his supposed actual reinstatement.Costs against petitioner.

GALLERA DE GUISON HERMANOS INC. v. CRUZ June 10, 2004Facts: Private respondent Cruz was a cashier and stockholder of Petitioner Gallera de Guison Hermanos, Inc. since 1976. On February 15, 1998, private respondent wrote Gallera requesting that she be assigned as Liaison Officer, which is a more challenging job than as a cashier. Atty. Sumawang, Gallera’s counsel, replied to her than the Board is not in a legal position to consider the request because an employee cannot be appointed to another position which would result in the reduction of his existing

salary and that the duties and responsibilities of a Liaison Officer are already being performed by some of the management staff. Subsequently, due to the alleged ill treatment and harassment perpetrated by Galera’s management against the private respondent, the latter procured a medical certificate and went on sick leave. While on leave, petitioners appointed one relative of the Cruz, as cashier. Meanwhile, Atty. Sumawang; wrote private respondent advising her that upon her return to work she shall cease and desist from occupying and performing the duties of cashier and instead she shall report for work on a no work no pay basis in the meantime that the management is studying to which position she will be transferred. Eventually, she was designated as liaison officer. However, one day, due to her absence on the said date, the salary of Cruz was withheld. Her designation as liaison officer in the payroll on even date was likewise removed. Thereafter, the private respondent did not report for work. Despite offers from Gallera for her to return, on a “no work, no pay basis,” except the allowances and other cash entitlements to the position, Cruz file with DOLE a complaint for illegal dismissal. The labor arbiter issued a decision declaring private respondent to have been illegally dismissed by petitioners. The petitioners then filed a petition for certiorari with the CA which dismissed the petition ruling that contrary to the petitioners’ contention that respondent resigned from her position as cashier, the latter was actually removed from her position by the petitioners. Subsequently, the petitioners appointed Cruz as liaison officer, a move which entailed a demotion in her position and diminution of salaries, privileges and other benefits. Hence, the Court of Appeals concluded that Cruz was constructively dismissed and declared her entitled to backwages, separation pay and attorney’s fees. The officers who consented to her transfer were held solidarily liable with Gallera. Issue: Whether or not Cruz was illegally dismissed Held: The instant petition raises a fundamental factual issue which has already been exhaustively discussed and passed upon by the Labor Arbiter and the Court of Appeals, i.e, whether Cruz was dismissed for cause. The appellate court, dismissing the petitioners’ petition for


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certiorari assailing the NLRC’s dismissal of their appeal and upholding the decision of the Labor Arbiter, ruled that Cruz was illegally dismissed and the dismissal was attended by bad faith on the part of the petitioners; hence, the petitioners are solidarily liable for Cruz’ monetary claims consisting of separation pay, backwages and attorney’s fees.It is notable to mention “time and again the much-repeated but not so well-heeded rule that findings of fact of the CA, particularly where it is in absolute agreement with that of the NLRC and the Labor Arbiter, as in this case, are accorded not only respect but even finality and are deemed binding upon this Court so long as they are supported by substantial evidence.”ASUFRIN, JR. vs. SAN MIGUEL CORPORATION G.R. No. 156658 March 10, 2004

Facts: Coca-Cola Plant, then a department of respondent SMC, hired the petitioner as a utility/miscellaneous worker. He subsequently became a regular employee paid on a daily basis as a Forklift Operator. He afterwards became a monthly paid employee when he was promoted as a Stock Clerk. When the sales office and operations at the branch where the petitioner worked were reorganized, several positions including his was abolished. The company upon reviewing his qualifications then designated the petitioner as a designated checker at the sales office.

However, the real problem arose when respondent SMC implemented a new marketing system known as the “pre-selling scheme” at the beer sales office. As a consequence thereof, all position of route sales and warehouse personnel were declared redundant. The respondent notified the DOLE and the personnel affected which includes the petitioner. Thereafter, the employees whose positions were declared redundant were informed that they could avail of the respondent corporation’s early retirement package pursuant to the retrenchment program, while those who will not avail of the same will be redeployed or absorbed at other offices. Petitioner opted to remain and manifested with the Acting Director his intention to accept any job considering that he has 3 children in college.

Petitioner was surprised however later to find out that his name was

included in the list of those who accepted the early retirement package. His request to be assigned to any department and position was ignored by the Acting Manager. This prompted the petitioner to file a complaint for illegal dismissal against the SMC. The Labor Arbiter dismissed the complaint and upon appeal to the NLRC, the latter set aside the decision of the Labor Arbiter. SMC in turn appealed to the CA which reversed the decision of the NLRC and reinstated the decision of the Labor Arbiter and thus this present case.

Issue: Whether or not the petitioner’s dismissal is based on a just and authorized cause

Held: The determination that the employee’s services are no longer necessary or sustainable and, therefore, properly terminable is an exercise of business judgment of the employer. The wisdom or soundness of this judgment is not subject to discretionary review of the Labor Arbiter nor the NLRC, provided that there is no violation of law and no showing that it was prompted by an arbitrary or malicious act. In other words, it is not enough for a company to merely declare that it has been overmanned. It must produce adequate proof that such is the actual situation to justify the dismissal of the affected employees for redundancy.

Persuasive as the explanation given by respondent to justify the dismissal, a number of disturbing circumstances however left the court unconvinced like the ignorance of the corporation of the request of the petitioner to be deployed in any position, his being in another branch’s payroll, despite the shut down of the warehousing operations, the office was still used as a warehouse, and in selecting the employees to be dismissed it appears that no criterion was adopted by respondent.

It bears stressing that whether it be redundancy or retrenchment or any of the other authorized causes, no employee may be dismissed without the observance of the fundamentals of good faith. It is not difficult for employers to abolish positions in the guise of a cost-cutting measure and we should not be easily swayed by such schemes which are all too often to near nothing what is left of rubble of rights of our exploited workers. Given the nature of the petitioner’s job as a Warehouse Checker, it is inconceivable that the


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respondent could not accommodate his services considering that the Warehousing operations have not shut down.

Thus, the dismissal of the petitioner should be declared as illegal.

J.A.T. GENERAL SERVICES V. NLRC421 SCRA 78

Facts: JAT is a single proprietorship engaged in the business of selling second hand heavy equipment. It hired Jose Mascarinas as helper and tasked to coordinate with the cleaning and delivery of the heavy equipment sold to customers.

The sales of heavy equipment declined because of the Asian currency crisis. JAT temporarily suspended its operations. It advised its employees not to report for work.

Mascarinas filed a case for illegal dismissal before the NLRC.

JAT filed an Establishment Termination with the DOLE, notifying the latter of its decision to close its business operations due to business losses and financial reverses.

The labor arbiter rendered a decision finding the dismissal unjustified and ordering JAT to pay the respondent separation pay and backwages.

The labor arbiter ruled that

Mascarinas’ dismissal was unjustified

because of petitioner’s failure to serve

upon the respondent and the DOLE the

required written notice of termination

at least one month prior to the

effectivity thereof and to submit proof

showing that petitioners suffered a

business slowdown in operations and

sales.

On appeal, the NLRC affirmed the said decision.

Issue: Whether or not respondent was illegally dismissed from employment due to the closure of the petitioner’s business.

Held: The Court affirmed the decision of the CA, which upheld the decision of the NLRC finding that there was illegal dismissal for failure to comply with the requirement provided for by law.

While business reverses or losses are recognized by law as an authorized cause for terminating employment it is an essential requirement that alleged losses in business operations must be proven convincingly.

Three requirements are necessary for a valid cessation of business operations, namely: a) service of a written notice to the employees and to the DOLE at least one month before the intended date thereof; b) the cessation of business must be bona fide in character; and c) payment to the employees of the termination pay amounting to at least one-half month pay for every year of service, or one month pay, whichever is higher.

Closure of business, as an authorized cause for termination of employment, aims to prevent further financial drain upon an employer who cannot pay anymore his employees since business has already stopped.

RAMOS vs. COURT OF APPEALSG.R. No. 145405

Facts: Petitioner was first employed by Union Bank as post audit clerk. He later became a branch cashier and subsequently as acting branch manager. During his management, one Rudy Paras was assigned as branch cashier. Thereafter, the Central Accounting Division of the Bank reported certain unreconciled statements amounting to millions.

By the time of its discovery, Paras had long resigned and could no longer be found.

Consequently, petitioner was dismissed due to negligence/serious dereliction of duty resulting in loss of trust and confidence by management.

Petitioner filed an action for illegal dismissal. The labor arbiter ruled in his favor. However, it was reversed by NLRC and affirmed by CA, hence the petition.

Issue: Whether or not the dismissal is proper.

Ruling: To validly dismiss an employee on the ground of loss of


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trust and confidence, the following guidelines must be followed:

1. the loss of confidence must not be simulated;

2. it should not be used to subterfuge for causes which are illegal, improper or unjustified;

3. it may not be arbitrarily asserted in the face of overwhelming evidence to the contrary;

4. it must be genuine, not a mere afterthought, to justify earlier action taken in bad faith;

5. the employee involved holds a position of trust and confidence

In the case at bar, petitioner held a position of trust and confidence as the regular branch cashier and acting branch manager. He was utterly negligent in performing his duties as acting branch manager. The scam perpetrated could have been easily detected had petitioner conscientiously done his job in carefully overseeing the operations. Union Bank therefore had reason to lose trust and confidence and to impose penalty of dismissal on him.

ADELINO FELIX vs. NATIONAL LABOR RELATIONS COMMISSION and REPUBLIC ASAHI GLASS CORPORATIONG.R. No. 148256. November 17, 2004

Facts: Petitioner was hired by the company as a Cadet Engineer and became a supervisor, a position he held until January 1992.

In January 1992, he was designated as Marketing Officer II, a position at the company’s Fabricated Glass Division Marketing (FGD Marketing).

As Marketing Officer II of the FGD Marketing, the bulk of petitioner’s functions is related to sales.

Sometime in July 1994, he was asked by certain officers of the company to resign and accept a separation package. Petitioner refused to resign and accept separation benefits.

He was not given work and another employee, Tacata, was assigned to take over his post and function.

He, through his lawyer, warned the company about the illegality of its actions.

In replying to petitioner’s letter, the company emphasized that given the series of irresponsible and inefficient acts he had committed justified the initiation of an administrative proceeding against him.

The company went on to declare that it had finally decided to initiate disciplinary action against him in view of his irresponsibility in sending the letter which pre-empted management prerogatives.

Thus the company directed petitioner to explain in writing within 48 hours from receipt thereof why his services should not be terminated for loss of trust and confidence.

Petitioner denied the charges against him, explaining that his absence for 6 days from May 29 to June 5, 1992 was occasioned by some problems at home which he had to personally attend to. The company subsequently terminated petitioner’s services for loss of trust and confidence.

Petitioner lodged a complaint for illegal dismissal.

Issue: Whether or not the company’s loss of trust and confidence in petitioner is founded on facts established by substantial and competent evidence

Held: No, The employer's evidence, although not required to be of such degree as that required in criminal cases, i.e., proof beyond reasonable doubt, must be substantial.

It must clearly and convincingly establish the facts upon which loss of confidence in the employee is based.

In the case at bar, the company failed to discharge this burden.

While the company complained of petitioner having incurred 6 days of absence without leave from May 29 to June 5, 1992, records do not disclose that petitioner incurred any further absences without leave.

More importantly, except for that incident in 1992, the company failed to show that there were instances during the 14 years that petitioner had been employed that he incurred absences without leave.

The propriety of petitioner’s 6 days of absence having priorly been settled by the parties, the company may no longer ask petitioner to, more than two years later, re-explain his absence and use the same to justify his dismissal.


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As for the charge that petitioner had not been attending the daily 3 minutes meeting of the FGD Marketing, the company took no action on the matter, nor warned petitioner that his attendance in the meetings was mandatory.

It was several months later when the company first called his attention to it and used it as a basis for dismissing him.

A company is expected to call the attention of an employee to any undesirable act or omission within a reasonable time. In the case at bar, the failure of the company to timely take any disciplinary action against petitioner weakens its claim that petitioner’s continued absence in the meetings rendered him unfit for continued employment with it.

That the company hastily dismissed petitioner is clearly apparent. He was not given adequate time to prepare for his defense, but was peremptorily dismissed, even without any formal investigation or hearing.

Where the employee denies the charges against him, a hearing is necessary to thresh out any doubt. The failure of the company to give petitioner, who denied the charges against him, the benefit of a hearing and an investigation before his termination constitutes an infringement of his constitutional right to due process.

As for the other two charges – that petitioner as a field officer unnecessarily lingered or killed time at the place of clients and engaged them in arguments and quarrels, and that he visited UMC (Mandaluyong) only when called upon to do so – the company failed to substantiate the same.

Tacata’s (replacement of petitioner) statement that “Arnel Deunida [Supply Superintendent of FMC] requested that our customer service and QA Staffs resume their regular visits to FMC to inspect and evaluate glass rejects” gives credence to the allegation of petitioner that he regularly visited his client and it was only in late July 1994 that he could no longer do so for Tacata having taken over his position.

Petitioner had long been divested of responsibility over these accounts when complaints were documented by respondent corporation.

As to the other complaints regarding rejected glasses and returns due to scratches, distortion, chipping and no-hole, mispacking and handling

procedure: nowhere it is shown that petitioner was directly responsible for the rejected glasses and items.

Petitioner’s function at the FGD Marketing was confined to sales.

Except for the mere allegation of petitioner’s manager that its clients have been complaining of petitioner’s work attitude and performance, there is no concrete evidence to show the same.

Absent any standard of performance upon which petitioner was rated on the job, loss of confidence has no basis.

Even if all the allegations-charges to the petitioner are true, they are not of such nature which merits the penalty of dismissal, given petitioner’s service for 14 years.

Dismissal is unduly harsh and grossly disproportionate to the charges; the penalty imposed should be commensurate to the gravity of his offense.

An employer may terminate the services of an employee due to loss of trust and confidence; however, the loss must be based not on ordinary breach by the latter of the trust reposed in him by the former, but, in the language of Article 28[2]c of the Labor Code, on willful breach.

A breach is willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently.

Dismissal must rest on substantial grounds and not on the employer’s arbitrariness, whims, caprice or suspicion; otherwise, the employee would eternally remain at the mercy of the employer.

There must therefore be an actual breach of duty committed by the employee which must be established by substantial evidence.

There being no basis in law or in fact justifying petitioner’s dismissal on the basis of loss of trust and confidence, his dismissal was illegal.

PHILTREAD TIRE & RUBBER CORPORATION, vs. ALBERTO VICENTEG.R. No. 142759. November 10, 2004

Facts: Alberto M. Vicente, respondent, was employed by Philtread Tire and Rubber Corporation, petitioner. At the time of his dismissal from the service, he was a housekeeping coordinator at the General Services Department, receiving a


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monthly salary of P8,784.00. One of his duties was to recommend to petitioner, for its approval, projects intended for the beautification and maintenance of its premises.

Engr. Ramon Y. Dumo, Administrative Officer and Head of petitioner’s Security and Safety Department, received a complaint from Crisente Avis, a sign painter with whom petitioner had a service contract. Avis reported that he was being forced by respondent to overprice by P1,000.00 his service fee of P3,800.00 and to deliver to him (respondent) the said amount of P1,000.00; and that should Avis fail to do so, he will no longer be awarded future contracts.

Dumo conducted an investigation attended by respondent, Avis, and three representatives from the workers’ union. Avis declared that sometime in January 1991, petitioner hired him to paint its trash cans, push carts and cigarette waste boxes. They agreed that his services will be paid upon completion of the painting job and submission of the corresponding invoice. However, herein respondent instructed him to prepare an invoice indicating therein that his fee for his painting services is P4,800.00, instead of P3,800.00. Respondent even assured him that the petitioner will approve the invoice.

At this juncture, petitioner assigned respondent to perform janitorial duties, prompting him to request an immediate disposition of his case. But when petitioner directed him to submit his evidence within three (3) days from notice, he failed to comply.

After evaluating the records on hand, petitioner found respondent guilty of extortion, fraud, serious misconduct and willful breach of trust and confidence. Petitioner then sent him a notice terminating his services

Respondent filed with the Labor Arbiter a complaint for illegal dismissal and damages against petitioner and Engr. Dumo. The Labor Arbiter dismissed respondent’s complaint

Upon appeal, the National Labor Relations Commission (NLRC) reversed the Labor Arbiter’s assailed decision

Petitioner then filed a motion for reconsideration but was denied by the NLRC it filed with this Court a petition for certiorari with prayer for the issuance of a temporary restraining order.

The Appellate Court rendered a Decision affirming the assailed Decision of the NLRC. The petitioner filed a motion for reconsideration, but was denied by the Appellate Court Held: The issue raised is factual. It is basic that the findings of fact by the Court of Appeals, when supported by substantial evidence, are conclusive and binding upon the parties and are not reviewable by this Court, unless the case falls under any of the exceptions to the rule, such as when the findings by the Appellate Court are not supported by evidence. This exception is being relied upon by petitioner.

Here, there is neither direct nor documentary evidence to prove that respondent was involved in extortion it is not clear that respondent urged or forced Avis to increase his service fee by P1,000.00 and to give the amount to him (respondent). In fact, Avis is not certain whether respondent was really serious when he allegedly told him (Avis) to increase his service fee to P4,800.00. We thus hold that petitioner failed to prove its charge by substantial evidence. Substantial evidence is that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion.

Respondent who was illegally dismissed from work is entitled to reinstatement without loss of seniority rights, full back wages, inclusive of allowances, and other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.

However, the circumstances obtaining in this case do not warrant the reinstatement of respondent. Aside from the fact that antagonism caused a severe strain in the parties’ employer-employee relationship, Petitioner Company has “completely ceased its tire manufacturing and marketing operations

Hence, he is entitled to a separation pay. Decision AFFIRMED with MODIFICATION in the sense that, in lieu of reinstatement, respondent is awarded


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separation pay equivalent to P114, 192.00, plus his full back wages, and other privileges and benefits, or their monetary equivalent, during the period of his dismissal up to his supposed actual reinstatement.PHILIPPINE JOURNALISTS, INC. vs. MICHAEL MOSQUEDAG.R. No. 141430 May 7, 2004

Facts: Petitioner was sequestered by the PCGG and by virtue of the writs of sequestration issued by the Sandiganbayan, PJI was placed under the management of PCGG. Rosario Olivares, one of the stockholders, attempted to regain control of the PJI management. Separate stockholder meetings were held, where each group elected its own members to the Board of Directors.

The Olivares Group passed Resolution No. 92-2 designating Michael Mosqueda, respondent, as Chairman of a Task Force, along with five (5) other members, to protect the properties, funds and assets of PJI and enforce or implement directives, instructions and orders of the Olivares group. Thereafter, Abraham J. Buenaluz, Officer-in-charge of PJI’s Administrative Services Division, charged them with "serious misconduct prejudicial to the interest of the company and/or present management; willful breach of trust and confidence; conflict of interest; and disloyalty under the PJI Personnel Handbook".

Petitioner’s new management placed respondent and other members of the Task Force under preventive suspension pending the investigation of the formal charges against them. Prior to the investigation, the Journal Employees Union (Union), for and in behalf of respondent and other members, filed with the Labor Arbiter a complaint for illegal suspension, unfair labor practice, and damages against petitioner.

Upon recommendation of Officer-in-charge Buenaluz, petitioner terminated the services of respondent and the other members of the Task Force. The Labor Arbiter rendered a Decision holding that respondent and the other five employees were illegally dismissed from employment and ordering petitioner (1) to reinstate them to their former positions and (2) to pay their backwages and moral and exemplary damages. The National Labor Relations Commission affirmed the Arbiter’s decision with modification.

Respondent filed with the Court of Appeals a petition for certiorari assailing, as grave abuse of discretion, the NLRC’s deletion of the award of backwages, damages and attorney’s fees. The Court of Appeals granted the petition and reinstated the Arbiter’s award of damages. Petitioner now comes to this Court via a petition for review on certiorariIssue: Whether or not the award of damages is properHeld: Under Art. 279 of the Labor Code, an employee who is unjustly dismissed is entitled to reinstatement, without loss of seniority rights and other privileges, and to the payment of his full backwages, inclusive of allowances, and other benefits or their monetary equivalent, computed from the time his compensation was withheld from him (which, as a rule, is from the time of his illegal dismissal) up to the time of his actual reinstatement.

The Court does not see any reason to depart from the foregoing rule in the case of herein respondent who, as held by three (3) independent bodies, was illegally dismissed, and thus, rightfully entitled to an award of full backwages, inclusive of allowances and other benefits or their monetary equivalent, computed from March 10, 1992, the date of his illegal dismissal (and not from March 11, 1992 as erroneously held by the Court of Appeals) up to the time of his actual reinstatement.The decision is AFFIRMED with MODIFICATION in the sense that respondent is awarded his full backwages, other privileges and benefits, or their monetary equivalent corresponding to the period of his dismissal from March 10, 1992 up to his actual reinstatement.

ACD Investigation Security Agency, Inc. v. DaqueraG.R. No. 147473 March 30, 2004

Facts: On February 15, 1990, Pablo Daquera was employed as a security guard by ACD Investigation Security Agency, Inc. Subsequently, or on September 1, 1994, he was reassigned to Public Estates Authority as a security officer. However, he was illegally dismissed for dishonesty, without prior written notice and investigation.

Daquera filed a complaint for illegal dismissal, illegal suspension, illegal deduction and non-payment of benefits with the Labor Arbiter.


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The Labor Arbiter finds that the respondent’s dismissal from employment is illegal.

On appeal, the national Labor Relations Commission [NLRC] affirmed the Arbiter’s Decision. A motion for reconsideration was also denied by the NLRC.

Petitioner then filed with the Court of Appeals a petition for certiorari seeking to set aside the NLRC decision and resolution. The CA affirmed the Decision of the NLRC. A motion for reconsideration was also denied by the Appellate Court.

Thus, this petition

Issue: Whether or not the respondent’s dismissal from his work is valid.

Held: No, it is not.In order to constitute a valid dismissal, two requisites must concur: [a] the dismissal must for any of the causes expressed in Article 282 of the Labor Code; and [b] the employee must be accorded due process, basic of which is the opportunity to be heard and to defend himself.

Records show that respondent was never notified in writing of the particular acts constituting the charge of dishonesty. Neither was he required to give his side regarding the alleged serious misconduct imputed against him. Simply states, respondent was not served by petitioner with notices, verbal or written, informing him of the particular acts for which his dismissal is sought.

COCA-COLA BOTTLERS PHILIPPINES, INC. vs. DOMINIC E. VITAL

G.R. No. 154384. September 13, 2004

Facts: Dominic E. Vital, respondent, was employed by Coca-Cola Bottlers Philippines, Inc., petitioner, as route driver/helper at its Antipolo Plant, with a monthly salary of P12,860.00. He was also assigned to perform the duties of a salesman. Petitioner, intending to increase the sale of its products, implemented “Operation Rurok,” a local marketing campaign that allows its trusted wholesaler outlets to retrieve foreign empties and/or bottles of petitioner’s competitors, such as Pepsi Cola and Cosmos, from regular customer outlets, in exchange for Coca-Cola containers and products.

Lagula, the District Sales Supervisor, issued respondent Miscellaneous Slip authorizing him to deliver, in exchange for retrieved Pepsi-Cola and Cosmos empties or bottles, 57 cases of 12 oz. Coca-Cola products to AMC Viray Store situated in Tambunting Street, Blumentritt. Subsequently Lagula again handed respondent Miscellaneous Slip No. 75711 authorizing him to deliver, pursuant to an “exclusivity agreement,” 90 cases of 12 oz. Coca-Cola products to Cora’s Store situated in Cuenco Street. For the third time, Lagula issued respondent Miscellaneous Slip No. 87449 authorizing him to deliver, as replacement for retrieved foreign empties, 95 cases of 12 oz. Coca-Cola products to John Uy at La Loma, Quezon City.Petitioner sent respondent a notice of an investigation of its complaint against him for forgery, fictitious sales transactions, falsification of company documents, unauthorized retrieval of empties, pursuant to Sections 10 and 12, Rule 005-85 of the company’s Code of Disciplinary Rules and Regulations. Petitioner then placed respondent under preventive suspension. In the meantime, petitioner, in an Interoffice Memorandum dated October 14, 1996, stopped implementing “Operation Rurok.”During the clarificatory hearing conducted by petitioner respondent admitted that he deviated from the instructions stated in the Miscellaneous Slips handed to him by his supervisor, Lagula. He stated that in three separate instances, Lagula instructed him to deliver the Coca-Cola products to other outlets. Eventually, petitioner sent respondent an Interoffice Memorandum dated February 8, 1997 terminating his services for loss of trust and confidence. Respondent filed with the Labor Arbiter a complaint for illegal dismissal and damages against.Issue: Whether or not respondent is entitled to reinstatement without loss of seniority rights.Ruling: Respondent who was illegally dismissed from work is entitled to reinstatement without loss of seniority rights, full backwages, inclusive of allowances, and other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. In fact, there is no showing that respondent’s acts were inimical to


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petitioner’s interest. Petitioner has not also shown that previously, respondent violated any of its rules or regulations. Certainly, respondent’s acts may be considered as isolated incidents not amounting to a willful disobedience or violation of petitioner company’s rules and regulations.However, the circumstances obtaining in this case do not warrant the reinstatement of respondent. Antagonism caused a severe strain in the relationship between him and petitioner company. A more equitable disposition would be an award of separation pay equivalent to at least one month pay, or one month pay for every year of service, whichever is higher, (with a fraction of at least six (6) months being considered as one (1) whole year), in addition to his full backwages, allowances and other benefits. R.P. Dinglasan Construction, Inc. vs. AtienzaG.R. No. 156104June 29, 2004

Facts The petitioner R. P. Dinglasan Construction, Inc. is a provider of a Janitorial Services to Pilipinas Shell Refinery Corporation. The respondents in this case served as petitioner’s janitor assigned with the Shell Corporation.

In a meeting, the petitioner informed the respondent and three (3) other employees that they will be terminated because they lost in the bidding with Shell. However they were informed that they may re apply as helpers and redeployed in other companies where petitioner has a subsisting contracts.

Respondents however refused to accept such offer, contending that the offer is tantamount to demotion and they would lost seniority status and would not be guaranteed to work at a regular hours.

Later, a complaint was filed for non-payment of their salary. During the conciliation proceedings, petitioner informed them that they will be reinstated with Shell provided they have to submit some documentary requirements. However, they failed to do so, hence they will declared absent without official leave.

Labor Arbiter rendered decision in the labor case, finding that the respondent were illegally dismissed and ordering their restatement.

Issue: Whether or not the onus probandi rest on the employer in an illegal dismissal case.

Ruling: The Supreme Court held that, in an illegal dismissal case, the unos probandi rests on the employer to prove that its dismissal of an employee is for a valid cause. In the case at bar, petitioner failed to discharge its burden. It failed to establish that private respondents deliberately and unjustifiably refused to resume their employment without any intention of returning to work.

ELECTRUCK ASIA, INC. vs. EMMANUEL M. MERIS ,et al.

Facts: Respondents and their twenty-eight co-employees filed on February 1, 1996 a complaint for illegal dismissal with prayer for reinstatement to their former positions, with full backwages and without loss of seniority rights.

By Decision of September 27, 1996 which noted that there was “no need for trial on the merits,” Labor Arbiter De Asis, finding as follows: Here, complainants’ concerted action demonstrates a moral perverse attitude toward their employer. By leaving their work unattended and undone and sleeping on company’s time, in effect, complainants are robbing the company of a fair day’s labor. This is plain and simple dishonesty, and applying the Wenphil doctrine which, by his words, “upheld the validity of the dismissal despite the non-observance of due process of law,” dismissed respondents’ Complaint.

The Labor Arbiter’s decision was appealed to the National Labor Relations Commission and by Resolution of May 28, 1997, the NLRC dismissed the appeal for lack of merit. Respondents filed a petition for certiorari before the Court of Appeals . By Decision 31, 2000, the Court of Appeals (CA) reversed and set aside the Resolutions of the NLRC . In reversing the NLRC, the appellate court held that both the NLRC and the Labor Arbiter failed to anchor their conclusions upon substantial evidence. At the outset, it should be stressed that the petitioners are not required to prove their innocence of the charges leveled against them by their employer. A su converso, the employer must affirmatively show rationally


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adequate evidence that the dismissal was for a just cause. ISSUE: Whether or not there exist a just cause for terminating respondent’s employment RULING: It is settled that the findings of facts of administrative agencies, such as the NLRC, must be respected so long as they are supported by substantial evidence. Deviation from this well-established rule must, however, be made when the Labor Arbiter and the NLRC clearly misappreciated the facts, thereby impairing the employees’ right to security of tenure.

In illegal dismissal cases, the onus probandi lies on the employer. Petitioner has failed in this respect, however.Contrary to petitioner’s allegation and the findings of both the Labor Arbiter and the NLRC, no evidence was presented to prove that respondents were caught sleeping by Datson. Why no sworn statement or affidavit of Datson to substantiate such claim, petitioner proffered no reason. Parenthetically, it is highly unlikely and contrary to human experience that all fifty-five employees including respondents were at the same time sleeping. As for petitioner’s contention that the Serrano ruling is not applicable, the same is well-taken but not for the reason it proffered. The Serrano doctrine which dispenses with the twin requirement of notice and hearing does not apply to the case at bar because, as already discussed, petitioner had not proved that the termination of respondents was for a just or authorized cause.CHIANG KAI SHEK COLLEGE, ET AL. VS. COURT OF APPEALS G.R. No. 153988, August 24, 2004

Facts: Belo is a teacher of CKSC since 1977. She applied for a leave of absence for SY 1992-1993 because her children had no yaya to take care of them. Her leave of absence was approved. After one-year leave of absence, she was denied and not accepted when she signified her readiness to teach. Belo filed with the Labor Arbitration Office a complaint for illegal dismissal. The Labor Arbitrator dismissed the complaint, reasoning that there was simply no available teaching load for her. On

appeal, NLRC reversed the decision of the Labor Arbiter. Petitioner filed a petition for certiorari with the CA. CA ruled that NLRC acted correctly when it ascertained that Belo was dismissed constructively. Thus, this petitionIssue: Whether or not Belo was illegally dismissed.Held: Yes, It must be noted that Belo has been a full-time teacher in CKSC for 15 years until she took a leave of absence for the SY 1992-1993.Under the Manual of Regulations for Private Schools, for a private school teacher to acquire a permanent status of employment, the following requisites must concur: 1) The teacher is a full-time teacher; 2) the teacher must have rendered 3 consecutive years of service; and 3) such service must have been satisfactory. Since Belo has measured up these standards, she therefore enjoys security of tenure thus the school should be held liable for its refusal to accept her after her one-year leave of absence.

Constructive DismissalTHE PHILIPPINE AMERICAN LIFE AND GENERAL INSURANCE CO. vs. ANGELITA S. GRAMAJEG.R. No. 156963. November 11, 2004

Facts: Petitioner employed private respondent as Assistant Vice President and Head of the Pensions Department and in concurrent capacity as Trust Officer of Philam Savings Bank.

Working as Assistant Vice President of Pensions Department of Philamlife, private respondent was offered an additional position by petitioner Cuisia for the position of Head of Trust Banking Division or AVP-Trust Officer on a concurrent capacity and under a separate compensation.

However, respondent’s marketing manager and marketing officer were immediately transferred to Group Insurance Division. Respondent, thereafter, was never given replacements for the marketing manager and marketing officer, contrary to petitioner Cuisia’s assurance. Thus, private respondent ran the Pensions Department single-handedly with only one administrative assistant as her staff.

Petitioner through its officers Centeno and Sotelo offered her P250,000.00 for her to vacate her position which respondent declined the offer


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considering that there was no valid reason for her to leave.

Petitioner issued a memorandum instructing her to transfer to the Legal Department.

Respondent protested the sudden unexplained transfer, more so a non-existing position, and stressed that she was hired because of her marketing, finance, and fund management skills, not her legal skills. She also made of record that her department surpassed the target fund level volume set by the company.

Respondent availed of her housing and car benefits and applied for a car loan and housing loan which the petitioner declined.

Petitioner, while on Official Sick Leave, received a message in her pager that the Pensions Department was assumed to be headed by Corine Moralda as her successor and the Pensions Department was to be immediately physically transferred at the Philamlife Gammon Center in Makati City. Though sick and on official sick leave, petitioner went to the office to verify, and upon seeing the Pensions Department totally dark, without any staff and with left over fixtures, petitioner, emotionally shattered, opted to just leave the premises.

Also, while it is the tradition of Philamlife to give, during the Christmas Season, officers and employees a traditional Season’s giveaways, i.e., ham and queso de bola, petitioner then, thru her authorized representatives, asked for her share, but she was not in the list of recipients. Petitioner’s name was not in the Legal Department, not in the Pensions Department, and not in the list of employees of Philamlife when verified with the Personnel Department.

Hence, on December 23, 1998, petitioner filed the instant case for illegal or constructive dismissal against herein private respondents.

Issue: Whether or not respondent constructively dismissed or was her transfer a legitimate exercise of management prerogative

Held: There is constructive dismissal of the respondent.

In the pursuit of its legitimate business interests, management has the prerogative to transfer or assign employees from one office or area of operation to another – provided there is no demotion in rank or diminution of salary,

benefits, and other privileges; and the action is not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion without sufficient cause.

In the case at bar, bad faith and discrimination on the part of petitioner are profusely perceived from its actions.

First, as early as 23 August 1998, unknown to respondent, petitioner had already advertised in the Manila Bulletin for her replacement. Respondent was not even notified in advance of an impending transfer.

Second, the President and CEO of petitioner corporation, Jose L. Cuisia, Jr., in his Memorandum dated 18 December 1998, announced the appointment of respondent’s replacement effective 14 December 1998, or during the time that respondent was still on official sick leave. It is worthy to note that on 10 December 1998, respondent, through a letter of even date, protested her sudden unexplained transfer, more so, to a non-existing position. Respondent, in said letter, likewise pointed out that her department surpassed the target fund level volume set by the company (which negates petitioner’s allegation of ineptness on the part of respondent, used as ground by the former to justify the transfer), and thereby requested for status quo, until all issues were resolved.

Third, the transfer of respondent to the Legal Department was unreasonable, inconvenient and prejudicial to her. Petitioner must have known that respondent has no adequate exposure in the field of litigation, and yet she was transferred to the Legal Department.

Fourth, there was, likewise, discrimination against respondent, as shown from the following: (a) the Pensions Department was run by respondent with practically no support from management. Respondent was left to fend for herself, and yet was required to bring in the numbers, i.e., generate and develop accounts; (b) respondent tried to avail herself of her car loan benefit by filing the appropriate application. However, action on this application was deferred by Reynaldo Centeno in his letter saying that respondent’s employment status has been the subject of several discussions between the high ranking officers of petitioner; and (c) it is a tradition on the part of petitioner, during the Christmas season, to give its officers and employees a season’s giveaway, i.e., ham and queso de bola.


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Respondent sent an authorized representative to ask for her share, but, unfortunately, she was not in the list of recipients. Her name was not listed in the Legal Department, nor in the Pensions Department. Respondent’s name, when verified with the Personnel Department, was not in the list of employees of Philamlife.

Fifth, respondent formally rejected the offer of P250,000 for her to leave the company.

The right and privilege of the employer to exercise the so-called management prerogative is recognized, and the courts will not interfere with it. This privilege is inherent in the right of employers to control and manage their enterprise effectively.

But, like other rights, there are limits thereto. The managerial prerogative to transfer personnel must be exercised without grave abuse of discretion, bearing in mind the basic elements of justice and fair play.

Having the right should not be confused with the manner in which that right is exercised. Thus, it cannot be used as a ploy by the employer to rid himself of an undesirable worker.

The employer must be able to show that the transfer is not unreasonable, inconvenient or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and other benefits.

Should the employer fail to overcome this burden of proof, the employee’s transfer shall be tantamount to constructive dismissal.

Likewise, constructive dismissal exists when an act of clear discrimination, insensibility or disdain by an employer has become so unbearable to the employee leaving him with no option but to forego with his continued employment.

Hence, SC rules there was constructive dismissal.

Petitioner has repeatedly asserted that the performance of respondent did not meet the expectation of the company and did not comply with accepted standards for a pension profit center manager, as she lacked the skill, as well as the willingness, to perform her duties and responsibilities. But it is rather odd that the alleged ineptness of respondent did not prompt petitioner to issue any Inter-office Memorandum reprimanding, admonishing, or warning the former about her performance.

Petitioner maintains that it was respondent who severed her working relationship with it. Per letter dated 11 January 1999 issued by petitioner’s Legal Department, respondent was asked to report immediately to her new assignment and submit to a medical examination, and that the latter took no heed of this. It seems that the point impliedly being raised by petitioner is that respondent disengaged her employment relationship with petitioner by abandoning her work and failing to report accordingly. This argument is dubious. Respondent, on 23 December 1998, already filed a case for illegal dismissal against petitioner. For petitioner to expect respondent to report for work after the latter already filed a case for illegal dismissal before the NLRC, would be absurd.

For abandonment to exist, it is essential (1) that the employee must have failed to report for work or must have been absent without valid or justifiable reason; and (2) that there must have been a clear intention to sever the employer-employee relationship manifested by some overt acts. Both these requisites are not present.

FERNANDO GO vs. COURT OF APPEALS and MOLDEX PRODUCTS, INC., G.R. No. 158922. May 28, 2004

Facts: On April 26, 1986, petitioner Moldex, hired private respondent, Fernando Go as a salesman with monthly salary and an allowance. Over the years, private respondent worked himself within petitioner’s corporate structure until he eventually attained the rank of Senior Sales Manager.

As the Senior Sales Manager of private respondent, petitioner was responsible for overseeing and managing the sales force of the company such as dealing with clients, getting orders, entering into agreement with clients, subject to the approval of higher management.

It appears that sometime in 1998, the accounts handled by the petitioner and his staff experienced collection problems. This difficulty in collection necessitated the conduct of an investigation by the respondent, which led to the discovery of anomalies. Among the sales personnel investigated was a member of petitioner’s division.


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Consequently, respondent corporation dismissed a number of its personnel.

For its part, respondent claimed that it also questioned petitioner and that “obviously feeling guilty for not exercising effective supervision over his subordinates, petitioner submitted a letter of resignation dated October 12, 1998 but effective on November 16, 1998.” Respondent added that petitioner went on leave from October 12, 1998 to November 16, 1998. While on leave, petitioner worked for the release of his clearance and the payment of 13th month pay and leave pay benefits.

Petitioner averred that he was not investigated. Petitioner further alleged that after the investigation, he was surprised to receive an advice from the respondent that his services were being terminated by the latter on account of command responsibility. But since the petitioner was not involved in the anomalies, he was promised payment of separation pay, commission and other benefits due him on account of his long and dedicated employment with the respondent. In addition, the respondent also granted to petitioner a distributorship agreement for the right to be a distributor of its products. In exchange, petitioner was asked to submit a courtesy resignation to the respondent. Thereafter, petitioner’s responsibility as the senior sales manager of the respondent was eventually stripped from him.

On March 21, 2000, petitioner filed with the NLRC a complaint for constructive dismissal, separation pay, service incentive leave including damages and attorney’s fees against the respondent.

On April 30, 2001, Labor Arbiter Abrasaldo-Cuyuca rendered a Decision in favor of the complainant and against the respondent, declaring the dismissal of complainant illegal and ordering respondent to pay complainant his backwages in the amount of P1,597,916.67, as well as his separation pay in the amount of P375,000.00

Respondent appealed the aforesaid decision to the NLRC, which the latter affirmed with modification the Labor Arbiter’s decision. Respondent sought a reconsideration of the NLRC decision which was denied.

Respondent filed a petition for certiorari with the Court of Appeals. The Court of Appeals annulled and set aside the twin resolutions of the NLRC.

Hence, the petition for review

Issue: Whether or not the petitioner was constructively dismissed.

Ruling: Constructive dismissal exists where there is a cessation of work because continued employment is rendered impossible, unreasonable or unlikely. It is present when an employee’s functions, which were originally supervisory in nature, were reduced, and such reduction is not grounded on valid grounds such as genuine business necessity.

As correctly observed by the Court of Appeals, it should be remembered that the petitioner has submitted a letter of resignation. It is thus incumbent upon him to substantiate his claim that his resignation was not voluntary but in truth was actually a constructive dismissal.

The failure of the petitioner to fully substantiate his claim that the respondent stripped him of his duties and functions is fatal to his present petition. Except for the sworn statements previously discussed, which the Court found to be lacking in probative value, petitioner did not present any other proof of the alleged stripping of his functions by the respondent. Petitioner’s bare allegations of constructive dismissal, when uncorroborated by the evidence on record, cannot be given credence.

Further, respondent presented copies of its confidential sales evaluation form which prove that, contrary to the allegations of the petitioner, he was still performing his duties and responsibilities one month prior to his resignation. This clearly negates his allegations that he was stripped of his duties.

Apparently, petitioner fully exercised the prerogatives and the responsibilities of his office as the Senior Sales Manager of the respondent during the time that the said functions were supposedly removed from him. Therefore, there can be no constructive dismissal to speak of. He who asserts must prove.

Moreover, after petitioner resigned, he went on leave from October 12, 1998 to November 16, 1998, the date of the effectivity of his resignation. While on leave, he worked for the release of his clearance and the payment of his 13th month pay and leave pay benefits. In doing so, he in fact performed all that an employee normally does after he resigns. Petitioner has taken his theory of coerced


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or manipulated resignation out of the equation. If indeed the petitioner was forced into resigning from the respondent, he would not have sought to be cleared by the respondent and to be paid the monies due him. Resignation is the formal pronouncement or relinquishment of an office. The voluntary nature of petitioner’s acts has manifested itself clearly and belie his claim of constructive dismissal.

The totality of the evidence indubitably shows that petitioner resigned from employment without any coercion or compulsion from respondent. His resignation was voluntary. As such, he shall only be entitled to his 13th month pay and leave pay benefits.The petition was DENIED and the decision of the Court Appeal dated June 30, 2003 was AFFIRMED. The complaint for constructive dismissal filed by respondent Fernando Go against petitioner was DISMISSED.

Resignation:

WILLI HAHN ENTERPRISES and/or WILLI HAHNvs. LILIA R. MAGHUYOP, G.R. No. 160348. December 17, 2004Facts: Respondent Lilia Maghuyop was hired by petitioner Willi Hahn as nanny of one of his sons. Later, she was employed as salesclerk of Willi Hahn Enterprises (Cubao branch). Then, she was promoted as store manager of its branch in SM Cebu.

Petitioner conducted an Inventory Report and discovered that its SM Cebu branch incurred stock shortages and non-remittances. Petitioner decided to terminate the services of respondent, however, before he could do so, the latter tendered her resignation. Believing the good faith of respondent in resigning, petitioner decided not to file charges against her anymore.

Respondent on the other hand, claimed that she was forced in signing the letter. Respondent filed a complaint with the NLRC, alleging that she should be awarded backwages, separation pay, 13th

month pay, damages and attorney’s fees.The Labor Arbiter ruled in her

favor. Dissatisfied with the award, respondent appealed to the NLRC which was however denied for lack of merit. On appeal, the Court of Appeals granted the petition and reversed the order of the

Labor Arbiter and NLRC. Hence, this petitionIssue: Whether or not respondent voluntarily resigned as manager of the SM Cebu Branch.Held: The letter is simple, candid and direct to the point. We find no merit in respondent’s claim that being a mere clerk, she did not realize the consequences of her resignation. Although she started as nanny to the son of petitioner Willi Hahn, she has risen to being the manager and officer-in-charge of the Willi Hahn Enterprises in SM Cebu branch.

The failure of petitioner to pursue the termination proceedings against respondent and to make her pay for the shortage incurred did not cast doubt on the voluntary nature of her resignation. A decision to give a graceful exit to an employee rather than to file an action for redress is perfectly within the discretion of an employer. It is not uncommon that an employee is permitted to resign to save face after the exposure of her malfeasance. Under the circumstances, the failure of petitioner to file action against the respondent should be considered as an act of compassion for one who used to be a trusted employee and a close member of the household.

Respondent’s unsubstantiated and self-serving claim that she was coerced into signing the resignation letter does not deserve credence. It is a basic rule in evidence that the burden of proof is on the part of the party who makes the allegations. Respondent failed to discharge this burden.

RetrenchmentEMCO PLYWOOD CORPORATION vs. ABELGAS et alG.R. No. 148532 April 14, 2004

Facts: EMCO is a domestic corporation engaged in the business of wood processing, operating through its sawmill and ply mill sections where [respondents] used to be assigned as regular workers.

EMCO informed the DOLE of its intention to retrench some of its workers. On the grounds of financial difficulties occasioned by alleged lack of raw materials, frequent machinery breakdown, low market demand and expiration of permit to operate its sawmill department.


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A memorandum was thereafter issued by EMCO, addressed to all its employees with the instructions that 58 yrs above and with good attitude and good performance will be retained. However it turned out that more than 200 employees were terminated including the respondents. They received their separation pay and made them to sign quitclaims and the attorney’s fees were deducted from them.

Respondents questioned the validity of their retrenchment and the sufficiency of the separation pay received by them before the LA.

LA dismissed their complaint for lack of merit. NLRC affirmed LA’s decision.

CA concluded that the retrenchment was illegal, because of EMCO’s failure to comply with the legal requirements.

Hence this petition by EMCO

Issue Whether or not there was a valid retrenchment.

Ruling: Retrenchment is one of the authorized causes for the dismissal of employees. Resorted to by employers to avoid or minimize business losses, it is recognized under Article 283 of the Labor Code.

Petitioners have failed to prove that their alleged losses were substantial, continuing and without any immediate prospect of abating; hence, the nature of the retrenchment is seriously disputable.

The losses expected should be substantial and not merely de minimis in extent. If the loss purportedly sought to be forestalled by retrenchment is clearly shown to be insubstantial and inconsequential in character, the bonafide nature of the retrenchment would appear to be seriously in question. Secondly, the substantial loss apprehended must be reasonably imminent, as such imminence can be perceived objectively and in good faith by the employer.

For a valid termination due to retrenchment, the law requires that written notices of the intended retrenchment be served by the employer on the worker and on the Department of Labor and Employment at least one (1) month before the actual date of the retrenchment. The purpose of this requirement is to give employees some time to prepare for the eventual loss of their jobs, as well as to give DOLE the

opportunity to ascertain the verity of the alleged cause of termination.

The Notice sent to DOLE was defective, because it stated that EMCO would terminate the services of 104 of its workers. The corporation, however, actually dismissed 250 the latter were not retrenched.

"Article 283. x x x In case of retrenchment to prevent losses x x x, the separation pay shall be equivalent to one (1) month pay or at least one half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year.

The obligation to pay attorney’s fees belongs to the union and cannot be shunted to the individual workers as their direct responsibility. The law has made clear that any agreement to the contrary shall be null and void ab initio. Thus, petitioners’ deduction of attorney’s fees from respondents’ separation pay has no basis in law.

Petition denied. SC Affirmed CA’s decision.

Valid Dismissal, Lack of Due ProcessJENNY M. AGABON and VIRGILIO C. AGABON VS. NLRC, RIVIERA HOME IMPROVEMENTS, INC. and VICENTE ANGELESG.R. No. 158693. November 17, 2004

Facts: Private respondent Riviera Home Improvements, Inc. employed petitioners Virgilio Agabon and Jenny Agabon as gypsum board and cornice installers until they were dismissed for abandonment of work.

Petitioners then filed a complaint for illegal dismissal and payment of money claims.

The Labor Arbiter rendered a decision declaring the dismissals illegal and ordered private respondent to pay the monetary claims.

On appeal, the NLRC reversed the Labor Arbiter because it found that the petitioners had abandoned their work and were not entitled to back wages and separation pay.

Petitioners filed a petition for certiorari with the Court of Appeals.

CA ruled that the dismissal of the petitioners was not illegal because they had abandoned their employment but ordered the payment of money claims.


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Issues: (1) Whether or not the petitioners were illegally dismissed (2) Whether or not respondent company complied with statutory due process

Held: Petitioners were frequently absent having subcontracted for an installation work for another company. Subcontracting for another company clearly showed the intention to severe the employer-employee relationship with private respondent. This was not the first time they did this.

They did not report for work because they were working for another company. Private respondent at that time warned petitioners that they would be dismissed if this happened again.

Petitioners disregarded the warning and exhibited a clear intention to severe their employer-employee relationship.

In Sandoval Shipyard v. Clave, The Court held that an employee who deliberately absented from work without leave or permission from his employer, for the purpose of looking for a job elsewhere, is considered to have abandoned his job.

We should apply that rule with more reason here where petitioners were absent because they were already working in another company.

The terminations were for a just and valid cause.

The dismissal is for just or authorized cause but due process was not observed. The employer should be held liable for non-compliance with the procedural requirements of due process.

The dismissal should be upheld because it was established that the petitioners abandoned their jobs to work for another company. Private respondent, however, did not follow the notice requirements and instead argued that sending notices to the last known addresses would have been useless because they did not reside there anymore.

Unfortunately for the private respondent, this is not a valid excuse because the law mandates the twin notice requirements to the employee’s last known address. Thus, they should be held liable for non-compliance with the procedural requirements of due process.

Prior to 1989, the rule was that a dismissal or termination is illegal if the employee was not given any notice. In the 1989 case of Wenphil Corp. v. National Labor Relations Commission, we reversed this long-standing rule and held that the

dismissed employee, although not given any notice and hearing, was not entitled to reinstatement and back wages because the dismissal was for grave misconduct and insubordination, a just ground for termination under Article 282.

The dismissal of an employee must be for just or authorized cause and after due process.Where the employer had a valid reason to dismiss an employee but did not follow the due process requirement, the dismissal may be upheld but the employer will be penalized to pay an indemnity to the employee. This became known as the Wenphil or Belated Due Process Rule.

An employer should not be compelled to pay employees for work not actually performed and in fact abandoned.

Where the dismissal is for a just cause, as in the instant case, the lack of statutory due process should not nullify the dismissal, or render it illegal, or ineffectual. However, the employer should indemnify the employee for the violation of his statutory rights.

The violation of the petitioners’ right to statutory due process by the private respondent warrants the payment of indemnity in the form of nominal damages. The amount of such damages is addressed to the sound discretion of the court, taking into account the relevant circumstances.

It provides a vindication or recognition of this fundamental right granted to the latter under the Labor Code and its Implementing Rules.

Labor cases, jurisdiction:CALIFORNIA BUS LINE TRANSIT, INC. v. NLRC

Facts: Private respondents who were employed as drivers and conductors by petitioner CBL Inc. filed a complaint for illegal dismissal alleging that despite their regular employment status, they were not given work assignments.

Petitioner claimed that the termination of private respondents’ employment was a consequence of is closure of operations due to bankruptcy.

The labor arbiter ruled in favor of the private respondents. The NLRC upheld the decision of the labor arbiter.

On a petition for certiorari before this court, the petition was dismissed and the court ordered to reinstate private


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respondents with backwages or separation pay.

To enforce the court’s resolution, the labor arbiter ordered the computation of the private respondents’ respective monetary awards. However, the petitioner did not agree on the method used in arriving at the correct average monthly contributions. It appealed to the NLRC but the appeal was dismissed. Hence this petition

Issue: Whether or not the court has jurisdiction over the case.

Ruling: Findings of facts and conclusion of the NLRC are generally accorded not only great weight and respect but even clothed with finality and deemed binding on this court as long as they are supported by substantial evidence.

Petitioner submitted itself to the jurisdiction of Research and Information Unit of the NLRC. Through its authorized accountant, petitioner agreed that the computation of backwages and separation pay should be based on the monthly average earnings of the individual private respondents appearing on their SSS forms for 1988-1990, considering that the payrolls were no longer available. It cannot be allowed now to question the latter’s jurisdiction.

The court has time and again frowned on the practice of a party’s submitting his case for decision and then accepting the verdict only if favorable, while attacking it for lack of jurisdiction if it is not. The principle of estoppel applies here. The petitioner is barred from raising the question of jurisdiction for the first time in this petition before us when it failed to invoke it in the early stages of the proceedings.

Labor cases, Due Process:SHOPPES MANILA INC. vs. NLRCG.R.No.147125 January 14,2004

Facts: The petitioner is a domestic corporation engaged in garments manufacturing using the brand name “KAMISETA”. Among its employees were private respondent Lorie Torno and Maricar Buan.

A report was made on the alleged stealing of “KAMISETA” items which was ascribed against Buan and the private respondent.

On the basis of the said report, the petitioner issued a disciplinary action form

suspending the private respondent indefinitely without pay. On August 25, 1997, a notice of dismissal was addressed to the private respondent specifying the charge against her, the factual basis thereof and the imposable penalties for the said charge if proven.

The private respondent failed to appear during the scheduled hearing. Consequently, the petitioner decided to dismiss the private respondent from her employment. When notified of the petitioners decision, the private respondent filed a complaint for illegal dismissal with prayer for reinstatement and payment of backwages, non-payment of service incentive leave pay and 13th

month pay against the petitioner before the NCR Branch of the NLRC. The case was initially raffled to Labor Arbiter Emerson C. Tumanong. In the meantime, Tumanong was replaced by labor Arbiter Ermita Abrasaldo-Cuyuca(Cuyuca for brevity) who issued an order declaring that the case was submitted for decision.

On August 31, 1998, Cuyuca rendered decision holding that the respondent was illegally dismissed and directed the petitioner to pay P62,530 as backwages and P19,240 as separation pay to the private respondent.

Cuyuca declared that the private respondent was denied of her right to due process before she was dismissed from her employment and that the petitioner failed to show that it notified the private respondent of the charges against her. The petitioner also failed to show that the Private respondent receive the notice of dismissal. Hence, the dismissal of the private respondent was illegal. However, according to the labor arbiter, reinstatement could no longer be effected, as the relationship between the private respondent and the petitioner had been strained and ruptures. The private respondent’s claim for non-payment of service incentive leave and 13th month pay were denied for her failure to specify the period covered therein. Her claim of underpayment of wage was, likewise, denied, as it was not included in the original complaint.

Aggrieved, the petitioner appealed the decision to the NLRC, alleging that it deprived of its right to a formal hearing before the labor arbiter rendered decision. It argued that while the conduct of hering is not mandatory in labor cases, the Labor Arbiter was mandated to do so in this case because Tumanong had already declared


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that a formal hearing is necessary. Hence, the petitioner had acquired a vested right thereto. Cuyuca’s failure to conduct a hearing deprived the petitioner of its vested right; consequently, her decision was null and void. NLRC issued a resolution dismissing the appeal and affirming the decision of the labor arbiter.

The NLRC reasoned that a formal hearing of the case on its merits is not mandatory in labor cases but is dependent on the discretion of the labor arbiter who has the sole power to determine whether or not there is need for hearing. Thus, in finding that there was no longer a need to conduct a hearing before rendering a judgment of the case on the merits, Cuyuca cannot be said to have committed an error.

The NLRC also ruled that no error could be imputed to Cuyuca when she found that the petitioner did not comply with the two-notice requirement that (a)she was notified of the charges against her,(b)and the notice of dismissal was sent to her.

Motion for reconsideration was denied.

Dissatisfied, the petitioner filed a petition for certiorari under Rule 65 of the Rules of Court before the Court of Appeals. The petitioner alleged therein that Cuyuca committed a grave abuse of discretion when she rendered a decision without even conducting a formal hearing to enable the petitioner to cross-examine the private respondent and her witnesses. It reiterated the contention that it had acquired a vested right to a formal hearing when Tumanong granted its motion therefore. The CA rendered judgment affirming the decision of the NLRC and the finding of both the NLRC and Cuyuca that the private respondent was deprived of due process and was thus illegally dismissed. The CA ruled as laid down in Section 4, Rule 5 of the new Rules of Procedure of the NLRC, a formal hearing is not required in proceedings before the labor arbiter; hence, a failure on the part of Cuyuca to conduct a formal hearing prior to the rendition of judgment did not give rise to a grave abuse of discretion on her part. Moreover, the petitioner was able to appeal the decision of the labor arbiter to the NLRC; it cannot thus contend that it was deprived of its right to defend itself.

The petitioner’s motion for reconsideration was denied in CA. The petitioner forthwith filed the instant petition.

Issue: Whether or not petitioner was deprived of due processRulings: The Court agree with the CA that the petitioner did not have a vested right to a formal hearing simply and merely because Tumanong granted its motion and set the case for hearing. Pursuant to section 5, Rule 5 of the New Rules of Procedure of the NLRC, the labor arbiter has the authority to determine whether or not there is necessity to conduct formal hearings in cases brought before him for adjudication. The holding of a formal hearing or trial is discretionary with the labor arbiter and is something that the parties cannot demand as a matter of right. It is entirely within his authority to decide a labor case before him based on the position papers and supporting documents of the parties, without trial or formal hearing. The requirements of due process are satisfied when the parties are given the opportunity to submit position papers wherein they are supposed to attach all the documents that would prove their claim in case it be decided that no hearing should be conducted or was necessary. The order of Labor Arbiter Tumanong granting the petitioner’s motion for a hearing of the case was not conclusive and binding on Cuyuca who had the discretion either to hear the case was not conclusive and binding on Cuyuca who had the discretion either to hear the case before deciding it, or to forego with the hearing if, in her view, there was no longer a need therefore as the case could be resolved on its merits based on the records.

We affirm the finding of the CA that the private respondent was illegally dismissed. In order to effect a valid dismissal, the law requires that (a) there be just and valid cause as provided under Article 282 of the Labor Code; and (b) the employee be afforded on opportunity to be heard and defend himself.

As stated by the CA, the petitioner had failed to show that it had complied with the two-notice requirement: (a) a written notice containing a statement of the cause for the termination to afford the employee ample opportunity to be heard and defend himself with the assistance of his representative, if he so desires; (b) if the employer decides to terminate the services of


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the employee, the employer must notify him in writing of the decision to dismiss him, stating clearly the reason therefore. Hence, the petition was DENIED for lack of merit.

Labor cases, certification of forum shopping:HUNTINGTON STEEL PRODUCTS, INC. & SERAFIN NG, vs. NATIONAL LABOR RELATIONS COMMISSION, ORBASE et. al, G.R. No. 158311. November 17, 2004

Facts: An Illegal dismissal complaint with claim for damages was initiated by respondent Jaime Orbase and eleven others against petitioners Huntington Steel Products, Inc. and its President, Serafin Ng.

Petitioner filed a Motion to Dismiss assailing the private respondents’ failure to comply with the requirements of Revised Circular No. 28-91as implemented by Supreme Court Administrative Circular No. 04-94 averring that the Complaint which private respondents filed in the Arbitration Branch of the NLRC lacked a certification of non-forum shopping.

Petitioners’ Motion to Dismiss was granted by the Labor Arbiter.Petitioners filed a petition for certiorari before the Court of Appeals which denied the petition.

Issue: Whether the case should be dismissed by Labor Arbiter for failure to comply with Supreme Court Administrative Circular No. 04-94 on certification of non-forum shopping

Held: Compliance with the Circular was mandatory even in labor cases. The certificate of non-forum shopping as provided by this Court Circular 04-94 is mandatory and should accompany pleadings filed before the NLRC.

Nevertheless, in Loyola v. Court of Appeals, The Court held that substantial compliance with the requirement of certificate of non-forum shopping is sufficient. Here, we find that the certification of non-forum shopping was not filed simultaneously with the initiatory pleading; but the filing of the certification within the reglementary period of filing the initiatory pleading was substantial compliance.

The certification is a mandatory part of an initiatory pleading, i.e., the complaint, and its omission may be

excused only upon manifest equitable grounds proving substantial compliance therewith.

In the present case, the respondents reasoned that they failed to comply with the Circular because the complaint form supplied by the Labor Arbiter did not contain the required undertaking. They simply filled up the blanks therein. Hence, respondents should not be faulted for not having the certification of non-forum shopping in their complaint.

The strict application of the Circular in the instant case would be contrary to the goals of the Rules of Civil Procedure – that is, “just, speedy and inexpensive disposition of every action and proceeding.” Technical rules of procedure in labor cases are not to be strictly applied if the result would be detrimental to the working-man.

Labor cases, memorandum of appeal:SUNRISE MANNING AGENCY, INC. vs. NATIONAL LABOR RELATIONS COMMISSION and RUEL ZARASPEG.R. No. 146703. November 18, 2004

Facts: Private respondent Ruel Zaraspe was hired as Chief Cook of petitioner’s vessel M.V. “Nikolaos”. Zeraspe’s services were terminated by petitioner due to undesirable acts involving “insubordination, inefficiency and neglect of duty,” and theft. Aggrieved by his dismissal, private respondent filed an illegal dismissal case with the National Labor Relations Commission (NLRC).

The labor arbiter found the dismissal legal and accordingly dismissed the complaint.On appeal by private respondent, the NLRC reversed the Labor Arbiter’s decision.

Petitioner filed a Motion for Reconsideration which only raised the procedural issue of private respondent’s failure to serve it a copy of his memorandum of appeal.

This motion was denied by NLRC. Petitioner filed a petition for

certiorari with the Court of Appeals which affirmed the resolutions of the NLRC.

Issues: Whether or not the Labor Arbiter’s decision became final and executory for failure of respondent to serve a copy of his memorandum of appeal to petitioner

Whether or not the petitioner’s right to due process was violated for it was not given the opportunity to refute


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private respondent’s allegations in his memorandum of appeal

Held: Mere failure to serve a copy of a memorandum of appeal upon the opposing party does not bar the NLRC from entertaining an appeal.

Respondent's failure to furnish copy of his memorandum appeal to petitioner is not a jurisdictional defect and does not justify dismissal of the appeal.

The failure to give a copy of the appeal to the adverse party was a mere formal lapse, an excusable neglect.

SC acts on the petitions and simply require the petitioners to comply with the rule

While petitioner was not furnished a copy of private respondent’s memorandum of appeal, it eventually became a participant in the proceedings on appeal when it filed a motion for reconsideration of the NLRC Decision.

Petitioner cannot complain that it has been denied its right to due process by having been allegedly deprived of the opportunity to answer respondent's appeal on account of the latter's failure to furnish the former with a copy of his memorandum of appeal.

Petitioner had already the opportunity to answer respondent's appeal when he filed a motion for reconsideration of the earlier decision of the NLRC.

In limiting its motion for reconsideration to procedural or technical issues, petitioner effectively waived its opportunity to be heard on the merits of the case.

It was thus not deprived of its right to due process.

Deprivation of due process cannot be successfully invoked where a party was given the chance to be heard on his motion for reconsideration, as in the instant case, when private respondents were given the opportunity to present their side when they filed a letter of reconsideration of NLRC decision.

The essence of due process is simply an opportunity to be heard, or as applied to administrative proceedings, an opportunity to explain one's side or an opportunity to seek a reconsideration of the action or ruling complained of. The requirements are satisfied when the parties are afforded fair and reasonable opportunity to explain their side of the controversy at hand. What is frowned upon is the absolute lack of notice or hearing.

Labor cases, appeal bondBuenaobra vs. Lim King Guan

Facts: Petitioners were employees of private respondent. Petitioners filed a case against respondent for unfair labor practice. Labor arbiter ruled in favor of the petitioners.

Respondents filed a memorandum on appeal and a motion to dispense with the posting of a cash or surety appeal bond.

NLRC granted such motion.Petitioners moved for reconsideration on the ground that timely posting of an appeal bond is mandatory for the perfection of the appeal.

Issue: Whether or not the timely posting of an appeal bond is mandatory for the perfection of the appeal.

Held: The provision of Art.223 of the Labor Code requiring the posting of bond on appeals involving awards must be given liberal interpretation in the light of the desired objective of resolving controversies on the merits, if only to achieve substantial justice. Technicalities have no room in labor cases where the Rules of Court is applied only in a supplemental manner and only to effectuate objectives of the Labor Code.

Labor cases, verificationLORETA TORRES, ALCAIDE, ROSARIO MABANA, ET AL. vs. SPECIALIZED PACKAGING DEVELOPMENT CORPORATION and/or ALFREDO GAO (President) and PETER CHUA (General Manager) ET AL.G.R. No. 149634. July 6, 2004

Facts: Petitioners were employees of the Specialized Packaging Development Corporation (SPDC). They were laid off from they claim for illegal dismissal. It appears that there are (25) principal parties-petitioners who were former workers of private respondent Corporation and complainants in case as a result of their being laid-off from employment. Perusing the verification however, it was executed and signed by only two (2) petitioners, namely, Evelyn Dolom and Criselina Anquilo. To allow only two (2) of them to execute the required verification and certification, without the proper authorization of the others, would render Sec. 5, Rule 7 of the 1997 Rules of Civil


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Procedure inutile in avoiding the practice of non-forum shopping because the other principal petitioners, who did not execute and sign the same. The Petitioner raised the case to the CA but the same was dismissed by the CA, which found the verification and the certification against forum shopping to be either defective or insufficient. Hence the Petition was elevated to the S.C.Issue: Whether or not the lack of necessary required signature for the verification on forum shopping committed by the 25 principal parties-petitioner were fatal to the denial of the case.Held: The purpose of requiring verification is to secure an assurance that the allegations of the petition have been made in good faith; or are true and correct, not merely speculative, this requirement is simply a condition affecting the form of pleadings, and noncompliance therewith does not necessarily render it fatally defective. Verification is only a formal, not a jurisdictional requirement. These two signatories are unquestionably real parties in interest, who undoubtedly have sufficient knowledge and belief to swear to the truth of the allegations in the Petition. This verification is enough assurance that the matters alleged therein have been made in good faith or are true and correct, not merely speculative. The requirement of verification has thus been substantially complied with.

Petitioners need only show, therefore, that there was reasonable cause for the failure of some of them to sign the certification against forum shopping, and that the outright dismissal of the Petition would defeat the administration of justice. Petition is GRANTED.

CBA, Signing bonus:PHILACOR vs. Court of AppealsG.R. No. 149434 June 3, 2004

Facts: Petitioner is a domestic corporation engaged in the business of manufacturing refrigerators, freezers and washing machines. Respondent United Philacor Workers Union – NAFLU is the duly elected collective bargaining representative of the rank-and-file employees of petitioner. During the collective bargaining negotiations in 1997 petitioner offered to each employee and “early conclusion bonus”. Upon conclusion of the CBA

negotiations, petitioner accordingly gave this early signing bonus. In view of the expiration of this CBA, respondent union sent notice to petitioner of its desire to negotiate a new CBA. Petitioner and respondent union began their negotiations. Respondent union expressed dissatisfaction at the outcome of the negotiations and declared a deadlock. A conciliation and mediation conference (NCMB) was held but CBA negotiation between petitioner and respondent union failed notwithstanding the intervention of the NCMB. Respondent union went on strike for 11 days and blocked the ingress to and egress from petitioner’s 2 work plants. The labor dispute had to be referred to the Secretary of Labor and Employment because neither of the parties was willing to compromise their respective positions. Thereafter DOLE ordered the striking workers to return to work and the award of the signing bonus. Petitioner filed a Motion for Reconsideration which was denied thus it filed a petition for certiorari before CA which later dismissed the petition

Issue: Whether or not the award erroneous

Ruling: The SC on Petition for review held that the award for a signing bonus should partake the nature of an incentive and premium for peaceful negotiations and amicable resolution of disputes which apparently are not present in the instant case. Two things militate against the grant of the signing bonus: first, the non-fulfillment of the condition for which it was offered, i.e., the speedy and amicable conclusion of the CBA negotiations; and second, the failure of respondent union to prove that the grant of the said bonus is a long established tradition or a “regular practice” on the part of petitioner. While we do not fault any one party for the failure of the negotiations, it is apparent that there was no more goodwill between the parties and that the CBA was clearly not signed through their mutual efforts alone. Hence, the payment of the signing bonus is no longer justified and to order such payment would be unfair and unreasonable for petitioner.

A bonus is not a demandable and enforceable obligation. True, it may nevertheless be granted on equitable considerations as when the giving of such bonus has been the company's long and regular practice. To be considered a “regular


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practice,” however, the giving of the bonus should have been done over a long period of time, and must be shown to have been consistent and deliberate. In the case at bar the giving of such bonus cannot be deemed as an established practice considering that the same was given only once, that is, during the 1997 CBA negotiation.

CBA, Duty to bargain collectively

GENERAL MILLING CORPORATION vs. COURT OF APPEALS, GENERAL MILLING CORPORATION INDEPENDENT LABOR UNION (GMC-ILU), and RITO MANGUBAT

G.R. No. 146728 February 11, 2004

Facts: In its two plants located at Cebu City and Lapu-Lapu City, petitioner General Milling Corporation (GMC) employed 190 workers. They were all members of private respondent General Milling Corporation Independent Labor Union, a duly certified bargaining agent. GMC and the union concluded a collective bargaining agreement (CBA), which included the issue of representation effective for a term of three years. The CBA was effective for three years retroactive to December 1, 1988. Hence, it would expire on November 30, 1991.On November 29, 1991, a day before the expiration of the CBA, the union sent GMC a proposed CBA, with a request that a counter-proposal be submitted within ten (10) days.

As early as October 1991, however, GMC had received collective and individual letters from workers who stated that they had withdrawn from their union membership, on grounds of religious affiliation and personal differences. Believing that the union no longer had standing to negotiate a CBA, GMC did not send any counter-proposal.

On December 16, 1991, GMC wrote a letter to the union’s officers, Rito Mangubat and Victor Lastimoso. The letter stated that it felt there was no basis to negotiate with a union which no longer existed, but that management was nonetheless always willing to dialogue with them on matters of common concern and was open to suggestions on how the company may improve its operations. In

answer, the union officers wrote a letter dated December 19, 1991 disclaiming any massive disaffiliation or resignation from the union and submitted a manifesto, signed by its members, stating that they had not withdrawn from the union. On January 13, 1992, GMC dismissed Marcia Tumbiga, a union member, on the ground of incompetence. The union protested and requested GMC to submit the matter to the grievance procedure provided in the CBA. GMC, however, advised the union to "refer to our letter dated December 16, 1991.

The union filed a case for unfair labor practices against GMC for refusal to bargain collectively, the Labor Arbiter dismissed the complaint and instead ordered that a certification election be held to determine if the union still has the majority of the workers. On appeal, the NLRC ser aside the Labor Arbiter’s ruling stating that Art. 253-A of the Labor Code fixed the terms of the CBA and ordered GMC to abide with the proposed draft CBA of the union until November 30, 1993 or two (2) years after the expiration of the CBA. On GMC’s motion for reconsideration, the NLRC set aside its decision of January 30, 1998, through a resolution dated October 6, 1998. It found GMC’s doubts as to the status of the union justified and the allegation of coercion exerted by GMC on the union’s members to resign unfounded. Hence, the union filed a petition for certiorari before the Court of Appeals. The CA granted the petition, hence this appeal.Issue/s: Whether or not the Court of Appeals acted with grave abuse of discretion amounting to lack or excess of jurisdiction in finding GMC guilty of unfair labor practice for violating the duty to bargain collectively and/or interfering with the right of its employees to self-organization

Whether or not the Court of Appeals acted with grave abuse of discretion in imposing upon GMC the draft CBA proposed by the union for two years to begin from the expiration of the original CBA?Held: The law mandates that the representation provision of a CBA should last for five years. The relation between labor and management should be undisturbed until the last 60 days of the fifth year. Hence, it is indisputable that when the union requested for a renegotiation of the economic terms of the


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CBA on November 29, 1991, it was still the certified collective bargaining agent of the workers, because it was seeking said renegotiation within five (5) years from the date of effectivity of the CBA on December 1, 1988. The union’s proposal was also submitted within the prescribed 3-year period from the date of effectivity of the CBA, albeit just before the last day of said period. It was obvious that GMC had no valid reason to refuse to negotiate in good faith with the union. For refusing to send a counter-proposal to the union and to bargain anew on the economic terms of the CBA, the company committed an unfair labor practice under Article 248 of the Labor Code, which provides that: (g) To violate the duty to bargain collectively as prescribed by this Code;

ART. 252. Meaning of duty to bargain collectively. – The duty to bargain collectively means the performance of a mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement....

Under Article 252 above cited, both parties are required to perform their mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement. The union lived up to this obligation when it presented proposals for a new CBA to GMC within three (3) years from the effectivity of the original CBA. But GMC failed in its duty under Article 252. What it did was to devise a flimsy excuse, by questioning the existence of the union and the status of its membership to prevent any negotiation. It bears stressing that the procedure in collective bargaining prescribed by the Code is mandatory because of the basic interest of the state in ensuring lasting industrial peace. We hold that GMC’s refusal to make a counter-proposal to the union’s proposal for CBA negotiation is an indication of its bad faith. Where the employer did not even bother to submit an answer to the bargaining proposals of the union, there is a clear evasion of the duty to bargain collectively.STANDARD CHARTERED BANK EMPLOYEES UNION (NUBE) v. NIEVES CONFESSOR.

Facts: The Standard Chartered Bank and its union signed a five year collective bargaining agreement (CBA) with a

provision to renegotiate the terms thereof on the third year.

After the initiation of the collective bargaining process, with the inclusion of Umali, the President of the NUBE, the federation to which the union was affiliated, in the union’s negotiating panel, the negotiation pushed through.

The parties negotiated. However, for the provisions on signing bonuses and uniforms, the Union and the Bank failed to agree.

The union declared a deadlock and filed a Notice of Strike before the NCMB. The bank filed a complaint for ULP and damages before the NLRC.

The bank alleged that the union violated its duty to bargain as it did not bargain in good faith. Further, the union violated its no-strike no lock-out clause by filing a notice of strike before the NCMB.

The Secretary of Labor and Employment, Nieves Confesor, ordered the Standard Chartered Bank and the Union to execute a CBA incorporating the dispositions contained therein.

It shall retroact and remain effective for two years or until such time as a new CBA has superseded it. All provisions in the expired CBA not expressly modified or not passed upon are deemed retained while all new provisions which are being demanded by either party are deemed retained, but without prejudiced to such agreements as the parties may have arrived.

Issue: Whether or not, there was a ULP committed by the employees.

Held: The duty to bargain “does not compel either party to agree to a proposal or require the making of a concession.” Hence, the parties failure to agree did not amount to ULP under Art. 248(g) for violation of the duty to bargain.

While the refusal to furnish requested information is in itself an unfair labor practice but request must be written request as required by the Labor Code.

Wages, lienSPECIAL STEEL PRODUCTS, INC. V. VILLAREAL434 SCRA 19


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Facts: Lutgardo Villareal and Frederick So, worked for Special Steel as assistant sales manager and salesman, respectively.

Villareal obtained a car loan from the Bank of Commerce, with Special Steel as surety. Later on, he resigned.

Special Steel sponsored So, to attend a training course in Austria, as a reward for his outstanding sales performance. When he returned nine months thereafter, the company directed him to sign a memorandum providing that BOHLER, Special Steel’s principal company, requires trainees from Austria to continue working with the company for a period of three years after the training. Otherwise, the trainee shall refund to BOHLER $6,000.00.

Two years later, So resigned from the company.

The two demanded from the company payment of their separation benefits and other benefits, but the company refused and instead withheld their 13th month pay and other benefits.

The labor arbiter rendered judgment in favor of the two employees and was affirmed by the NLRC.Issue: May an employer withhold its employee’s wages and benefits as lien to protect its interest.Held: Article 116 of the Labor Code provides that “it shall be unlawful for any person, directly or indirectly, to withhold any amount from the wages of a worker xxx.”

The company has no legal authority to withhold its employees’ 13th

month pay and other benefits. What an employee has worked for, his employer must pay.

Wage distortion;BANKARD EMPLOYEES UNION-WATO vs. NLRC, BANKARDG.R. No. 140689 February 17,2004Facts: Bankard, Inc. (Bankard) classifies its employees by levels, to wit: Level I, Level II, Level III, Level IV, and Level V. On May 28, 1993, its Board of Directors approved a “New Salary Scale”, made retroactive to April 1, 1993, for the purpose of making its hiring rate competitive in the industry’s labor market. The “New Salary Scale” increased the hiring rates of new employees, to wit: Levels I and V by one thousand pesos (P1,000.00), and Levels II, III and IV by nine hundred pesos (P900.00).

Accordingly, the salaries of employees who fell below the new minimum rates were also adjusted to reach such rates under their levels.

Bankard’s move drew the Bankard Employees Union-WATU (petitioner), the duly certified exclusive bargaining agent of the regular rank and file employees of Bankard, to press for the increase in the salary of its old, regular employees.

Bankard took the position, however, that there was no obligation on the part of the management to grant to all its employees the same increase in an across-the-board manner.

As the continued request of petitioner for increase in the wages and salaries of Bankard’s regular employees remained unheeded, it filed a Notice of Strike on August 26, 1993 on the ground of discrimination and other acts of Unfair Labor Practice (ULP).

A director of the National Conciliation and Mediation Board treated the Notice of Strike as a “Preventive Mediation Case” based on a finding that the issues therein were “not strikeable”.

Petitioner filed another Notice of Strike on October 8, 1993 on the grounds of refusal to bargain, discrimination, and other acts of ULP - union busting. The strike was averted, however, when the dispute was certified by the Secretary of Labor and Employment for compulsory arbitration.

The NLRC, Find no wage distortion, dismissed the case for lack of merit. Petitioner’s motion for reconsideration denied.

Petitioner thereupon filed a petition for certiorari before this Court, docketed as G.R. 121970. In accordance with its ruling in St. Martin Funeral Homes v. NLRC(295 SCRA 494), the petition was referred to the Court of Appeals which, by October 28, 1999, denied the same for lack of merit. Hence, the present petition.Issue: WHETHER OR NOT THE UNILATERAL ADOPTION BY AN EMPLOYER OF AN UPGRADED SALARY SCALE WITHOUT INCREASING THE RATES OF OLD EMPLOYEES resulted in wage distortion within the contemplation of Article 124 of the Labor Code.Ruling: The issue of whether wage


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distortion exists being a question of fact that is within the jurisdiction of quasi-judicial tribunals, and it being a basic rule that findings of facts of quasi-judicial agencies, like the NLRC, are generally accorded not only respect but at times even finality if they are supported by substantial evidence, as are the findings in the case at bar, they must be respected. For these agencies have acquired expertise, their jurisdiction being confined to specific matters.

It is thus clear that there is no hierarchy of positions between the newly hired and regular employees of Bankard, hence, the first element of wage distortion is wanting.

Apart from the findings of fact of the NLRC and the Court of Appeals that some of the elements of wage distortion are absent, petitioner cannot legally obligate Bankard to correct the alleged “wage distortion” as the increase in the wages and salaries of the newly-hired was not due to a prescribed law or wage order.

The wordings of Article 124 are clear. If it was the intention of the legislators to cover all kinds of wage adjustments, then the language of the law should have been broad, not restrictive as it is currently phrased:Article 124. Standards/Criteria for Minimum Wage Fixing.

x x xWhere the application of any prescribed wage increase by virtue of a law or Wage Order issued by any Regional Board results in distortions of the wage structure within an establishment, the employer and the union shall negotiate to correct the distortions. Any dispute arising from the wage distortions shall be resolved through the grievance procedure under their collective bargaining agreement and, if it remains unresolved, through voluntary arbitration.

Holiday Pay:ASIAN TRANSMISSION CORP. vs. COURT OF APPEALSG.R. No. 144664 March 15, 2005

Facts: The DOLE through Undersecretary Cresenciano Trajano issued an Explanatory Bulletin dated March 11, 1993 wherein it clarified that employees are entitled to 200% of their basic wage on April 9, 1993, whether unworked, which apart from being a Good Friday is also

Araw ng Kagitingan (both are legal holiday). Said Bulletin was reproduced on January 23, 1998 when April 9, 1998 was both Maundy Thursday and Araw ng Kagitingan. Despite the explanatory bulletin, petitioner opted to pay its daily paid wage only 100% of their basic pay on April 9, 1998. Respondent Bisig ng Asian Transmission Labor (BATLU) protested.

The office of the Voluntary Arbitration rendered a decision directing a petitioner to pay its covered employees 200% and not just 100% of their regular daily wages for the unworked April 9,1998 which cover two(2) holidays. CA upheld the decision of Voluntary Arbitrator. Hence, this petition

Issue: Whether or not Asian Transmission Corporation can be hold liable for 200% wages, unworked which covers two regular holiday

Ruling: YES. Holiday pay is a legislated benefit enacted or part of the constitutional imperative that the state shall afford protection to labor. Its purpose is not merely “to prevent dimunition of the monthly income of the workers on account of work interruption. In other words, although the worker is forced to take a rest, he earns what he should earn, that is, his holiday pay. It is also intended to enable the worker to articipate in the national celebrations held during the days identified as with great historical and cultural significance.

Independence Day (June 12), Araw ng Kagitingan (April 9), National Heroes Day(last Sunday of August), Bonifacio Day(November 30) and Rizal Day (December 30) were declared national holidays to afford Filipinos with a recurring opportunity to commemorate the heroism of the Filipino people, promote national identity and deepen the spirit of patriotism. Labor Day (May 1) is a day traditionally reserved to celebrate the contributions of the working class to the development of the nation, while the religious holidays designated in EO No.203 allow the worker to celebrate his faith with his family.

As reflected above, Article 94 of the Labor Code, as amended, affords a worker the enjoyment of ten paid regular holidays. The provision is mandatory regardless whether an employee is paid on a monthly or daily basis. Unlike a bonus, which is a


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management prerogative, holiday pay is a statutory benefit demandable under the law. Since a worker is entitled to the enjoyment of ten paid regular holidays the fact that two holidays toll on the same date should not operate to reduce to nine the ten holiday pay benefits a worker is entitled to receive.

Separation Pay:CAMA vs. JONI’S FOOD SERVICES, INC. GR No. 153021 March 10, 2004

FACTS: The respondent Joni’s is a corporation engaged in the coffee shop and restaurant business with several branches or outlets. Co-respondent Feliciano is the President and General Manager of said corporation. Petitioners were employees of the said corporation.

The corporation experienced serious business losses prompting it and leaving it no choice but to close all its branches and outlets. One month before the target closure date of its remaining outlets, Joni’s sent notices of closure to the DOLE and to the complainants/petitioners who were then employed at the last remaining outlets of the respondent corporation.

The petitioners thereafter filed a petition for illegal dismissal, separation pay, service incentive leave pay, 13th

month pay, attorney’s fees, remittance of SSS and Pag-Ibig contributions, and refund of excess withholding taxes against Joni’s.

The Labor Arbiter declared that Joni’s is not guilty of illegal dismissal but the petitioners were entitled to separation pay. The Labor Arbiter ruled that though the corporation suffered business losses, nonetheless, he did not consider these serious enough so as to warrant denial of the petitioner’s separation pay. In an appeal to the NLRC, the decision of the Labor Arbiter was upheld. Respondent company appealed to the CA and the CA reversed the decision of the Arbiter and the NLRC that Joni’s is required to give the petitioners separation pay.

ISSUE: Whether or not the petitioners are entitled to separation pay even if the cause of their termination was serious business losses and financial reverses

HELD: It was duly established that corporation suffered losses which let it to close all its outlets. Using ratio analyses of the financial statements of the respondent corporation, it was found out and it can be

said that the solvency position of the latter was indeed poor. The greater proportion of assets of the corporation was being provided for by creditors rather than its owners. The situation became worse, with long-term debt accounting largely for its assets, hence there was a huge capital deficit.

From the foregoing analyses, there is inadequate and unsatisfactory profit ratio creating greater losses than profit. It becomes clear now that given these losses, the Joni’s found no other recourse but to shut down its outlets. And eventually they have no other option but to lay off their employees.

The Constitution, while affording full protection to labor, nonetheless, recognizes the right of enterprises to reasonable returns on investments, and to expansion and growth.” In line with this protection afforded too business by fundamental law, Article 283 of the Labor Code clearly makes a policy distinction. It is only in instances of “retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses” that employees whose employment has been terminated as a result are entitled to separation pay. In other words, Article 283 of the Labor Code does not obligate an employer to pay separation pay benefits when the closure is due to serious losses like in the present case. To require an employer to be generous when it is no longer in a position to do so, in our view, would be unduly oppressive, unjust, and unfair to the employer. Ours is a system of laws, and the law in protecting the rights of the working man, authorizes neither the oppression nor self-destruction of the employer. Hence, we find that the CA did not err when it decreed that petitioners herein are not entitled to separation pay under the same Labor Code article.

Strike:PINERO VS. NLRC G.R. NO. 149610, AUG. 20, 2004

Facts: Dumaguete Cathedral College, Inc. was the employer of the members of the labor union DUCACOFSA-NAFTEU. The Union and the College failed to conclude another CBA after the expiration of the previous CBA.

The Union filed a Notice of Strike with the DOLE on the ground of refusal to bargain. The Union conducted a strike


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without submitting to the Dole the required results of the strike vote obtained from the members of the Union. The College filed with the DOLE a complaint to declare the strike illegal and to dismiss the officers of the Union. Pinero was the President.

The Labor Arbiter declared the strike illegal and declared the Union officers to have lost their employment. While the case was pending with the NLRC, an agreement was made between the Union and the College. The Officers were all allowed to resume service without prejudice to the outcome of the case. NLRC affirmed the Labor Arbiter’s decision. CA also affirmed NLRC. Thus, the petition

Issue: Whether or not the strike was illegal

Held: Yes, Under the Labor Code, The requirements of a valid strike are as follows: 1) notice of strike filed with the DOLE 30 days before the intended date thereof, or 15 days in case of ULP; 2) strike vote approved by a majority of the total union membership in the bargaining unit concerned obtained by a secret ballot in a meeting called for such purpose; and 3) notice given to the DOLE of the results of the voting at least 7 days before the intended strike. These requirements are mandatory and failure of a union to comply therewith renders the strike illegal.

The Court notes that petitioner Pinero had already retired from service rendering his dismissal from service moot and academic. However, in view of the propriety of his termination due to illegal strike, he is no longer entitled to payment of retirement benefits.

Illegal strikeELIZABETH C. BASCON and NOEMI V. COLE, vs. COURT OF APPEALS, METRO CEBU COMMUNITY HOSPITAL, INC., and GREGORIO IYOYG.R. No. 144899 February 5, 2004

Facts: The petitioners were employees of private respondent Hospital and members of the NAMA-MCCH, a labor union of MCCH employees. The instant controversy arose from an intra-union conflict between the NAMA-MCCH and the National Labor Federation (NFL), the mother federation of NAMA-MCCH. NAMA-MCCH asked MCCH to

renew their Collective Bargaining Agreement (CBA). NFL, however, opposed this move by its local affiliate. Mindful of the apparent intra-union dispute, MCCH decided to defer the CBA negotiations until there was a determination as to which of said unions had the right to negotiate a new CBA. Believing that their union was the certified collective bargaining agent, the members and officers of NAMA-MCCH staged a series of mass actions inside MCCH’s premises.

The DOLE issued certifications stating that NAMA-MCCH was not a registered labor organization. This finding, however, did not deter NAMA-MCCH from filing a notice of strike. Said notice was, however, disregarded by the NCMB for want of legal personality of the union. The MCCH management received reports that petitioners participated in NAMA-MCCH’s mass actions. Consequently, notices were served on all union members, petitioners included, asking them to explain in writing why they were wearing red and black ribbons and roaming around the hospital with placards.

Petitioner was dismissed from employment because of her participation in the mass action. Bascon and Cole filed a complaint for illegal dismissal. They denied having participated in said mass actions or having received the notices (1) enjoining them from wearing armbands and putting up placards, with warning that disciplinary measure would be imposed, and (2) informing them of the schedule of hearing. They admit, however, to wearing armbands for union identity while nursing patients as per instruction of their union leaders. The Labor Arbiter found the termination complained to be valid and legal, and dismissed the complaint. The Labor Arbiter held that petitioners were justly dismissed because they actually participated in the illegal mass action. It also concluded that petitioners received the notices of hearing, but deliberately refused to attend the scheduled investigation. On appeal, the NLRC reversed the ruling of the Labor Arbiter. But the CA reversed the ruling of the NLRC.

Issue: Whether or not petitioners were validly terminated for (1) allegedly participating in an illegal strike. Held: The Supreme Court said that petitioner was not validly terminated. While a union officer can be terminated for mere participation in an illegal strike, an


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ordinary striking employee, like petitioners herein, must have participated in the commission of illegal acts during the strike. There must be proof that they committed illegal acts during the strike. But proof beyond reasonable doubt is not required. Substantial evidence, which may justify the imposition of the penalty of dismissal, may suffice.

In case at bar, the Court of Appeals found that petitioners’ actual participation in the illegal strike was limited to wearing armbands and putting up placards. There was no finding that the armbands or the placards contained offensive words or symbols. Thus, neither such wearing of armbands nor said putting up of placards can be construed as an illegal act. In fact, per se, they are within the mantle of constitutional protection under freedom of speech.

Evidence on record shows that various illegal acts were committed by unidentified union members in the course of the protracted mass action. But it cannot hold petitioners responsible for acts they did not commit. The law, obviously solicitous of the welfare of the common worker, requires, before termination may be considered, that an ordinary union member must have knowingly participated in the commission of illegal acts during a strike.

Samahang Manggagawa sa Sulpicio Lines, Inc.-NAFLU.et.al. vs. Sulpicio Lines

Facts: Respondent and petitioner union are in the process of negotiation on the CBA’s economic provisions. But this negotiation remained at stalemate.

On March 20, 1994 upon respondent’s petition, Sec. Confessor issued an order, assuming jurisdiction over the labor dispute pursuant to Art.263 (g) of the Labor Code.

On May 23,1994, union filed with NCMB a second notice of strike. Petitioner union immediately conducted a strike vote. Thus, on that same day, members of petitioner union did not report to work and proceeded with the strike.

As a remedial measure, Sec. Confessor issued an order directing the striking employees to return to work and certifying the labor dispute to NLRC for compulsory arbitration.

Respondent company filed with the NLRC a complaint for “Illegal strike/ clearance for termination” to which NLRC

declared the strike of Petitioner’s members illegal.

Issue: Whether or not the acts of the union members constitute an illegal strike.

Held: There is no showing that the petitioner union observed the 7-day strike ban and that the result of the strike vote were submitted by the petitioners to DOLE at least 7 days before the strike.

Participants in an illegal strike forfeit their employment status. It is worth reiterating that the strike votes to the Department of Labor and Employment at least 7 days prior thereto. Also, petitioner failed to prove that respondent company committed any unfair labor practice. Amid this background, the participation of the union officers in an illegal strike forfeits their employment status.

When the Secretary of Labor and Employment certifies the labor dispute to the NLRC for compulsory arbitration, the latter is concomitantly empowered to resolve all questions and controversies arising therefrom including cases otherwise belonging originally and exclusively to the Labor Arbiter.

Strike, Compromise agreements:

Filcon Manufacturing Co. v. LMF-LMLCGR 150166, July 26, 2004

Facts: Petitioner (Filcon) is a domestic corporation engaged in the manufacture of Converse rubber shoes. Its factory located at General Molina, Parang, Marikina.

In 1989, it employed 1,000 workers. Respondent Lakas Manggagawa sa Filcon-Lakas Manggagawa Labor Center is one of the legitimate labor organizations of the rank-and-file employees of the Filcon. On the other hand, the Shoe Workers Assoc. and Tech.(SWAT) is the exclusive bargaining agent of such rank-and-file employees.

The dispute started when 11 employees of the Filcon staged a strike after they were terminated by the latter.

Thereafter, employees filed a complaint for illegal dismissal with the National Arbitration Branch of the NLRC.

In turn, Filcon filed a complaint against the said employees to declare the strike illegal.

Pending the resolution of the (2) complaints, the respondent union-Bisig Manggagawa and Kampil Katipunan


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staged another stike.To prevent the transfer of raw

materials by the Filcon, members of the LMF-LMLC formed the picket lines at the factory gate.

On July 4, 1990,Filcon filed a Petition for Injunction with Prayer for an Ex Parte Temporary Restraining Order with NLRC aginst the respondent Union, SWAT praying that the respondent union's members be enjoined from picketing its premises, and desist from threatening the management personnel and non-strikers with bodily harm.

On August 30, 1990, the petitioner and respondents entered into a Compromise Agreement to maintain the status quo ante litem.

Petitioner alleged that: a) Respondent Union had no legal personality to file a notice of strike because the SWAT was the exclusive bargaining agent of the rank-and-file employees and b) that the filing of the notice of strike was violative of the existing CBA provisions - ”no-strike-no-lockout clause.

The respondent asserted that its agreement with the compromise contained a non-retaliatory clause and thereby, admitted without any reservation.

Issue: Was there a valid compromise agreement?

Held: There was no valid compromise agreement. The Supreme Court held that the parties' presentation of their respective evidence after the execution of the compromise agreement was conclusive proof that the said agreement is not compromise agreement contemplated in Article 2028, New Civil Code which stated that a compromise is a contract whereby the parties, by making reciprocal concessions, avoid litigation or put an end to one already commenced.

The parties merely agreed that the respondent would stop its strike against the petitioner and in turn, the latter (Filcon) would allow the members of the respondent Union to return back to their respective works to enable the petitioner to resume its business operation.

Stamford Marketing Corp. vs. Josephine JulianG.R. No. 145496 February 24, 2004

Facts: This is a consolidation of three cases

1st Case: Josephine Julian, et al. vs. Stamford Marketing Corp.

On November 9, 1994, or just a day after Apacible received the letter of PACIWU-TUCP, herein private respondents Josephine Julian, president of the newly organized labor union; Jacinta Tejada, and Jecina Burabod, board member and member of the said union, respectively, were effectively dismissed from employment.

Without further ado, the three dismissed employees filed suit with the Labor Arbiter. In their Complaint, the three dismissed employees alleged that petitioners had not paid them their overtime pay, holiday pay/premiums, rest day premium, 13th month pay for the year 1994, salaries for services actually rendered, and that illegal deduction had been made without their consent from their salaries for a cash bond.

2nd Case: Philippine Agricultural, Commercial and Industrial Workers’ Union, et al. vs. GSP Manufacturing Corp.

PACIWU-TUCP, filed on behalf of fifty (50) employees allegedly illegally dismissed for union membership by the petitioners, a Complaint before the Arbitration Branch of NLRC, Metro Manila. PACIWU-TUCP charged petitioners herein with unfair labor practice. The Complaint alleged that when Apacible received the letter of PACIWU-TUCP, management began to harass the members of the local chapter, a move which culminated in their outright dismissal from employment, without any just or lawful cause. It was a clear case of union-busting, averred PACIWU-TUCP.

3rd Case: Lucita Casero, et al. vs. GSP Manufacturing Corp., et al.

This separate case was also filed by the dismissed union members (complainants in NLRC NCR Case No. 00-03-02114-95), against the petitioners herein for payment of their monetary claims. The dismissed employees demanded the payment of (1) salary differentials due to underpayment of wages; (2) unpaid salaries/wages for work actually rendered; (3) 13th month pay for 1994; (4) cash equivalent of the service


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incentive leave; and (5) illegal deductions from their salaries for cash bonds.

In the first case the NLRC held respondent g Declaring the strike conducted by complainants to be illegal guilty of unfair labor practice, and declaring complainants’ dismissals illegal; in the second case, the NLRC declared the strike conducted by complainants to be illegal and in the third case, the NLRC ordered the company to pay individual complainants. The Court of Appeals modified the decision.Issue: Whether or not the Court of Appeals ruling is correctRuling: The Supreme Court AFFIRMED with MODIFICATION. Dismissal of the union officers is declared NOT INVALID, and the award of separation pay to said union officers is hereby DELETED. However, as a sanction for non-compliance with notice requirements for lawful termination by the petitioners, backwages are AWARDED to the union officers computed from the time they were dismissed until the final entry of judgment of this case. The rest of the dispositions of the Court of Appeals in its Decision of April 26, 2000, in CA-G.R. SP No. 53169, are hereby AFFIRMED.

The right to strike, while constitutionally recognized, is not without legal restrictions. The Labor Code regulates the exercise of said right by balancing the interests of labor and management in the light of the overarching public interest. Thus, paragraphs (c) and (f) of Article 263 mandate the following procedural steps to be followed before a strike may be staged: filing of notice of strike, taking of strike vote, and reporting of the strike vote result to the Department of Labor and Employment. It bears stressing that these requirements are mandatory, meaning, non-compliance therewith makes the strike illegal. The evident intention of the law in requiring the strike notice and strike-vote report is to reasonably regulate the right to strike, which is essential to the attainment of legitimate policy objectives embodied in the law.

Article 264 of the Labor Code, in

providing for the consequences of an illegal strike, makes a distinction between union officers and members who participated thereon. Thus, knowingly participating in an illegal strike is a valid ground for termination from employment of a union officer. The law, however, treats differently mere union members. Mere participation in an illegal strike is not a sufficient ground for termination of the services of the union members. The Labor Code protects an ordinary, rank-and-file union member who participated in such a strike from losing his job, provided that he did not commit an illegal act during the strike. Thus, absent any clear, substantial and convincing proof of illegal acts committed during an illegal strike, an ordinary striking worker or employee may not be terminated from work.

There is no dispute they could be dismissed for participating in an illegal strike. Union officers are duty- bound to guide their members to respect the law. Nonetheless, as in other termination cases, union officers must be given the required notices for terminating an employment, i.e., notice of hearing to enable them to present their side, and notice of termination, should their explanation prove unsatisfactory. Nothing in Article 264 of the Labor Code authorizes an immediate dismissal of a union officer for participating in an illegal strike. The act of dismissal is not intended to happen ipso facto but rather as an option that can be exercised by the employer and after compliance with the notice requirements for terminating an employee. In this case, petitioners did not give the required notices to the union officers.

Powers of Labor SecretaryMANILA DIAMOND HOTEL EMPLOYEES’ UNION vs. CAG.R. No. 140518. December 16, 2004Facts: The Union filed a petition for a certification election which was dismissed by the DOLE. A Notice of Strike was thereafter filed with the NCMB for the Hotel’s alleged refusal to bargain and for alleged acts of unfair labor practice. The Union staged a strike, which prompted the hotel to dismiss some employees.


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The Secretary of Labor, Cresencio Trajano, assumed jurisdiction over the labor dispute. An Order was issued directing the union to return to work within twenty-four (24) hours upon receipt of this Order and the Hotel to accept them back under the same terms and conditions prevailing prior to the strike.

The Union received the aforesaid Order and its members reported for work the next day. The Hotel, however, refused to accept the returning workers and instead filed a Motion for Reconsideration of the Secretary’s Order.

Then Acting Secretary of Labor Jose Español, issued the disputed Order, which modified the earlier one issued by Secretary Trajano. Instead of an actual return to work, Acting Secretary Español directed that the strikers be reinstated only in the payroll.

On appeal, CA dismissed the Union’s petition and affirmed the Secretary of Labor’s Order for payroll reinstatement. The Court of Appeals held that the challenged order is merely an error of judgment and not a grave abuse of discretion and that payroll reinstatement is not prohibited by law, but may be “called for” under certain circumstances. Hence, this appealIssue: Whether or not CA erred in ruling that the Secretary of Labor’s unauthorized order of mere payroll reinstatement is not grave abuse of discretion.Held: It is, therefore, evident from the foregoing that the Secretary’s subsequent order for mere payroll reinstatement constitutes grave abuse of discretion amounting to lack or excess of jurisdiction. Indeed, this Court has always recognized the “great breadth of discretion” by the Secretary once he assumes jurisdiction over a labor dispute.

However, payroll reinstatement in lieu of actual reinstatement is a departure from the rule in these cases and there must be showing of special circumstances rendering actual reinstatement impracticable, as in the UST case aforementioned, or otherwise not conducive to attaining the purpose of the law in providing for assumption of jurisdiction by the Secretary of Labor and Employment in a labor dispute that affects

the national interest. None appears to have been established in this case.

Even in the exercise of his discretion under Article 236(g), the Secretary must always keep in mind the purpose of the law. Time and again, this Court has held that when an official by-passes the law on the asserted ground of attaining a laudable objective, the same will not be maintained if the intendment or purpose of the law would be defeated. Trans-Asia Shipping lines- Unlicensed Crews Employees Union- Associated Labor Union ( Tasli-Alu) vs. CA

Facts: This Case was elevated to the SC from the decision of CA enjoining the NLRC from implementing its return to work order in connection with labor dispute of Trans-Asia and holding that it is within the management prerogative to not give embarkation order to returning employees.

Issue: Whether or not the CA enjoin a return to work order issued by NLRC in case certified to it by the Secretary of Labor, Whether or not the a return to work order in violation of the management prerogative?

Held: When the Secretary of Labor assumes jurisdiction over a labor dispute in an industry indispensable to national interest or certifies the same to NLRC for compulsory arbitration, it always co-exist with an order for workers to return to work immediately and for the employers to readmit all workers under the same terms and conditions prevailing before the strike or lock-out.

The power granted to the Secretary of Labor under Article 263 (g) of Labor Code is characterized as an exercise of police power of the State with the aim of promoting public good.

Law recognizes employers right to transfer or assign employees from one area to another in view of its management prerogative, however it is not absolute but subject to limitations imposed by law such as in Article 263 (g) of the Labor Code.

Illegal Recruitment:PEOPLE OF THE PHILIPPINES vs. FLOR GUTIERREZ G.R. No. 124439 February 5, 2004Facts: An information was filed against appellant for engaging in recruitment


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activities for overseas job placement without first obtaining the required license and/or authority from the Philippine Overseas Employment Administration (POEA).

The accused claimed that as an "employee" of Serafudin, a duly licensed agency who was tasked to recruit and offer job placements abroad, she could not be held liable for illegal recruitment. She admitted that she had no authority to recruit in her personal capacity, but that her authority emanated from a Special Power of Attorney (SPA) and a Certification issued by a licensed agency.

The trial court rendered its decision finding the accused guilty beyond reasonable doubt of Illegal Recruitment in Large Scale.

Issue: Whether or not the appellant is guilty of Illegal Recruitment in Large Scale.

Held: YES, appellant is guilty of Illegal Recruitment in Large Scale. The essential elements of the crime of illegal recruitment in large scale are: (1) the accused engages in acts of recruitment and placement of workers defined under Article 13(b) or in any prohibited activities under Art. 34 of the Labor Code; (2) the accused has not complied with the guidelines issued by the Secretary of Labor and Employment, particularly with respect to the securing of a license or an authority to recruit and deploy workers, either locally or overseas; and (3) the accused commits the unlawful acts against three or more persons, individually or as a group.

Section 11, Rule II, Book II of the Rules and Regulations Governing Overseas Employment requires the prior approval of the POEA of the appointment of representatives or agents. Approval by the Administration of the appointment or designation does not authorize the agent or representative to establish a branch or extension office of the licensed agency represented.

Section 1, Rule X of the same Book, in turn, provides that "recruitment and placement activities of agents or representatives appointed by a licensee, whose appointments were not authorized by the Administration shall likewise constitute illegal recruitment."

In the case at bar, the Certification from the POEA that it "has not received nor acknowledged the representation of Ms. Gutierrez" establishes that the appointment of appellant by Serafudin as a representative or agent was not authorized by the POEA. It may be true that the POEA received from Serafudin a revocation of appellant's appointment, but still is of no consequence since Serafudin in the first place did not submit her appointment to the POEA, and so the POEA has nothing to approve.

Certification Election:NOTRE DAME OF MANILA vs. LAGUESMAG.R. No. 149833

Facts: Private respondent filed a petition for direct certification as the sole and exclusive bargaining agent for certification election among the rank and file employees of petitioner. The petition was granted.

A pre-election conference was conducted. The date of the certification election was agreed and that the eligible voters shall be those employees appearing in the list submitted by management as agreed upon by the parties. Petitioner filed a motion to include probationary and substitute employees in the list, motion denied by a handwritten notation. Petitioner filed an appeal from said notation.

Thereafter, public respondent conducted the certification election. Petitioner later filed a written notice of protest against the conduct and results of the certification of election. The appeal was dismissed hence the petition.

Issue: Whether or not petitioner as the employer is a real party to the proceedings.

Ruling: Unless it filed a petition for a certification election pursuant to Article 258 of the Labor Code, the employer has no standing to question the election, which is the sole concern of the workers. The Labor Code stated that any party to an election may appeal the decision of the med-arbiter. Petitioner was not such a party to the proceedings, but a stranger which had no right to interfere therein.

Retirement Pay:


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DIVINA S. LOPEZvs. NATIONAL STEEL CORPORATION

G.R. No. 149674, February 16, 2004

FACTS: Sometime in 1980, respondent National Steel Corporation, embarked on two (2) massive projects, the Five-Year Expansion Program (Phase II-B) and the Integrated Steel Mill Project. It employed and trained several employees for the operation of the projects. One of them was petitioner Divina S. Lopez, who was appointed as researcher eventually, she was promoted as a senior researcher at respondent’s Market Research Department, receiving a monthly base pay of P22,481.00.

In 1994, respondent suffered substantial financial losses. With this development, respondent adopted an organizational streamlining program. On June 30, 1994, respondent issued a memorandum announcing the retrenchment of several workers at its Iligan and Pasig Plants and Makati Head Office. Petitioner’s services was terminated. She was paid P543,379.26 representing separation benefits for her 12 years of service and executed a Quitclaim and Release.

Barely three (3) years thereafter, petitioner filed with the Labor Arbiter a complaint for payment of retirement benefits against respondent. The Labor Arbiter rendered a Decision dismissing the complaint which was affirmed by the NLRC. This was elevated to the CA. However, it likewise upheld the resolution of the NLRC.

ISSUE: Whether or not petitioner is entitled to retirement benefits

RULING: It bears stressing that as held by the Labor Arbiter, the NLRC and the Court of Appeals, there is no provision in the parties’ CBA authorizing the payment to petitioner retirement benefits in addition to her retrenchment pay; and that there is no indication that she was forced or "duped" by respondent to sign the Release and Quitclaim. The Court of Appeals also ruled that petitioner, not having reached the retirement age, is not entitled to retirement benefits under Article 287 of the Labor Code.

The Court has always accorded respect and finality to the findings of fact of the Court of Appeals, particularly if they coincide with those of the Labor Arbiter and the NLRC when supported by substantial evidence, as in this case. The reason for this is that quasi-judicial agencies, like the Arbitration Board and the NLRC, have acquired a unique expertise because their jurisdictions are confined to specific matters. Suffice it to reiterate that the respondent’s retirement plan, quoted earlier, precludes employees, whose services were terminated for cause, from availing retirement benefits. Petition was denied.

Money Claims:KAR ASIA, INC., ET AL. VS. CORONA, ET AL. G.R. NO. 154985, AUG. 24, 2004

Facts: Respondents were regular employees of petitioner, an automotive dealer in Davao City. On Sept. 24, 1997, a complaint for underpayment of wages was filed before the Regional Arbitration Branch of Davao City.

They claimed that they were not paid their COLA for the months of Dec. 1993 and Dec. 1994. Petitioner countered that the complaint was false and malicious. It denied the non-payment of COLA and alleged that respondents scare off potential customers. The Labor Arbiter decided in favor of petitioners. NLRC affirmed such decision. CA, However, reversed NLRC’s decision.

Issue: Whether the petitioner company paid respondents their COLA for Dec. 1993 and Dec. 1994.

Held: Yes, A close scrutiny of the payroll readily discloses the signatures of the respondents opposite their printed names and the numeric value of P654. Respondents’ averment that petitioner harassed them into signing the payroll without giving them its cash equivalent cannot be given credence.

The allegations of harassment are inadmissible as self-serving statements and therefore cannot be repositories of truth. He who asserts, not he who denies must prove. More importantly, the unreasonable length of time in pursuing respondents’ claim militates against its grant. Art. 291 of the Labor Code requires that all money claims arising from employee-employer relations shall be filed


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within 3 years from the time that the cause of action accrued: otherwise they will be barred forever.

TEXON MANUFACTURING vs. MILLENAG.R. No. 141380 April 14, 2004

Facts: Marilyn and Grace Millena, respondents, were employed by Texon Manufacturing, petitioner Company. Petitioner company terminated the services of respondent Grace Millena, prompting her to file with the Labor Arbiter.

Similarly, on September 8, 1995, Petitioner Company terminated the services of respondent Marilyn Millena. The following day, she went to petitioner’s office to get her salary. Betty Chua then offered her the sum of P1, 500.00 as a starting capital for a small business and asked her to sign a blank piece of paper and turned out that it was a resignation letter and quitclaim of her back salaries. Thus, she filed with the Labor Arbiter a complaint for illegal dismissal with prayer for payment of full back wages and benefits money claims.

Petitioners filed a motion to dismiss both complaints on the ground of prescription.

The Labor Arbiter issued an Order denying the motion to dismiss. Petitioners then interposed an appeal to the (NLRC).NLRC promulgated an Order dismissing the appeal and affirming the Arbiter’s Order. Petitioners filed a motion for reconsideration but was denied by the NLRC.Consequently, petitioners filed a petition for certiorari with the Court of Appeals.CA rendered a Decision affirming the NLRC Order. In sustaining the denial by the NLRC of petitioners’ motion to dismiss

Issue: Whether or not the complaints, including money claims should be dismissed on the ground of prescription.

Ruling: Under "Article 291 of the Labor Code. Money claims. – All money claims arising from employer-employee relations accruing during the effectivity of this Code shall be filed within three years from the time the cause of action accrued, otherwise they shall be forever barred."

The Court disagree with petitioners’ contention that respondent Grace Millena’s cause of action for money

claims accrued "in the summer of 1991 and 1992" when, by reason of her employment, she became entitled to the company’s monetary benefits. Records show that it was only after petitioner company terminated her services, sometime in the summer of 1995, that she decided to file with the Labor Arbiter her complaint for money claim. The three (3) year prescriptive period should then be counted, not from 1991 or 1992, but from 1995. Respondent’s complaint was filed on August 21, 1995 or barely three (3) months after the termination of her employment in the summer of 1995. There is, therefore, no question that her complaint was seasonably filed.

As regards the claim for illegal dismissal, "One’s employment or profession is a ‘property right’ and the wrongful interference therewith is an actionable wrong. The right is considered to be property within the protection of the constitutional guarantee of due process of law. Clearly then, when one is arbitrarily and unjustly deprived of his job or means of livelihood, the action instituted to contest the legality of one’s dismissal from employment constitutes, in essence, an action predicated ‘upon an injury to the rights of the plaintiff,’ as contemplated under Article 1146 of the New Civil Code, which must be brought within 4 years."

The order of the Labor Arbiter denying petitioners’ motion to dismiss was not yet final as there was something else to be done, namely the filing of the answer and the subsequent proceedings wherein the respective parties would ventilate their respective sides. The Order of the Labor Arbiter denying petitioners’ motion to dismiss is interlocutory. It is well-settled that a denial of a motion to dismiss a complaint is an interlocutory order and hence, cannot be appealed, until a final judgment on the merits of the case is rendered. The Court affirmed the decision of CA.


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